"The dominant government-insured reverse mortgage program comes with high upfront lender fees, mortgage insurance premiums and newly toughened financial qualification requirements. A home equity credit line may be difficult for seniors to obtain because they cannot qualify on credit or debt-to-income grounds in today's stricter underwriting environment."
"It's a family-funded reverse mortgage known as the 'Caregiver' loan. It allows any number of children and grandchildren to pool resources to provide a flexible line of credit at interest rates far below what commercial reverse mortgage lenders charge and with far fewer hassles. In intra-family lending, there's no bank or mortgage company. Family members are the bank."
"You and your siblings are all doing well enough that you have at least some cash to spare. Ultimately, you want to retain your parents' house for the estate once your parents pass away, keep costs to a minimum and only sell the property when you, not a faraway bank, choose to."
Millions of seniors face cash flow challenges despite holding home equity but lacking sufficient retirement income. Traditional options include government-insured reverse mortgages with high upfront fees and strict qualification requirements, or home equity lines of credit that seniors often cannot obtain due to stricter lending standards. A new alternative emerged allowing families to create intra-family lending arrangements where children and grandchildren pool resources to provide flexible lines of credit to aging parents. This peer-to-peer family lending model eliminates bank intermediaries, reduces costs significantly compared to commercial reverse mortgages, and enables families to maintain control over property disposition and estate planning while helping seniors access needed funds.
Read at Los Angeles Times
Unable to calculate read time
Collection
[
|
...
]