Why You Should Talk to a Lawyer Before Getting a Reverse Mortgage
If you are a homeowner in the Denver metro area thinking about a reverse mortgage, you might feel like you’ve found a great way to fund your retirement. A reverse mortgage is a type of loan where the bank pays you, using your home’s equity as collateral. While it can be a helpful tool, it is also a complex legal decision. Before you sign those papers, you need to understand how a reverse mortgage affects your family and your future.
Protect Your Spouse and Your Home
One of the biggest risks of a reverse mortgage involves what happens to a spouse who isn't on the loan. For example, if one spouse is under age 62, they may not be listed as a borrower. You must make sure there are written protections in the loan documents for the non-borrowing spouse. Without these, a spouse could potentially lose their home if the borrowing spouse passes away or moves into a care facility. It is vital to know exactly what triggers the loan to become due so you aren't caught off guard while trying to enjoy life in Colorado.
Coordinating with Your Estate Plan
Many families in Centennial and across the front range use a living trust to protect their assets. However, reverse mortgages and trusts do not always play well together. If your home is already in a trust, the bank may require specific changes before they approve the loan. If you don't coordinate these two things correctly, you could accidentally undo the hard work you put into your estate planning.
What Will Your Heirs Actually Inherit?
It is a common dream for parents to leave the family home to their children. If you take out a reverse mortgage, your heirs need to understand they are inheriting a property with a debt attached. They will usually have to pay off the loan or sell the house to satisfy the bank. Before you sign, sit down with an attorney to see how this fits into your overall goals. Whether you're spending your weekends hiking or cheering on the Denver Broncos, having peace of mind about your legacy makes everything more enjoyable.
Schedule Your Consultation Today
Don't navigate these complex financial waters alone. If you are considering a reverse mortgage, let us help you ensure your family and your home are protected. We serve clients throughout the Denver metro area and are ready to help you build a plan that works.
Schedule a consultation with The McKenzie Law Firm, LLC today or call us at 720-821-7604.
The McKenzie Law Firm, LLC practices law exclusively in Colorado. This post is for general informational purposes only and does not constitute legal advice. Please consult a qualified attorney regarding your specific situation.
