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Who pays taxes on a reverse mortgage home that is no longer lived in?
Wiki User
∙ 12y ago
The owner of the property.
The owner of the property.
The owner of the property.
The owner of the property.
Wiki User
∙ 12y ago
Wiki User
∙ 12y agoThe owner of the property.
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Who pays real estate taxes on a reverse mortgage?
The owner of the home that still occupies the home and has the reverse mortgage is still responsible for maintaining the home and for paying the property taxes, and all other expenses in keeping the home in good condition.
What if the house is homesteaded and has a reverse mortgage on it and the person is 71 years and widowed living in it is there still property taxes to pay?
Yes unless for some reason that state has a property tax deferral program for certain lower income folks. But the person would need to apply for those benefits and make certain not to let property tax lapse as its a technical default with a reverse mortgage and can lead to forced loan closing or foreclosure.The homeowner is still responsible for all expensesrelating to the home when they obtain a reverse mortgage. That includes taxes, insurance, repairs, maintenance, utility costs, municipal assessments, etc. Their responsibilities are the same as they would be if they didn't have the reverse mortgage. In addition, a homestead is generally subordinated to a mortgage. To confirm that factor you can check the provisions set forth in the mortgage.
Will life insurance pay off a reverse mortgage?
Yes. Even better, it can reduce estate taxes. Without a mortgage, your home's value will be part of your total estate and subject to estate taxes. With a mortgage (reverse or otherwise), only the net equity portion will be added to the estate. The life insurance proceeds will be paid to your beneficiaries free of tax, and can then be used to extinguish the reverse mortgage balance. Many people who need the benefits of a reverse mortgage, but are concerned about "stealing" their kids' inheritance are electing this strategy. Let me give you an example of an arrangement I just helped a lady put in place. She obtained $336,000 from her reverse mortgage. We put that into an immediate annuity, which guarantees her a monthly income for life of $2,800. She is using $1,500 of that to pay the premium on a $500,000 life insurance policy, and the remaining $1,300 per month ($15,300/year - tax free) as additional income. When she dies, the $500,000 should be more than enough to repay the reverse mortgage. That's a great outcome - and one more seniors should look at.
Is reverse mortgage taxable?
lots of info on my site on this one, but in short the money you get from the reverse mortgage is not subject to income tax because it is borrowed money, not earned money. this is similar to a home equity line of credit taken out against a home, no income tax is paid on the loan. On the flip side, the interest you pay on a mortgage is tax deductible in the year you pay the interest, not necessarily in the year it accrues. Because a reverse mortgage does not require mortgage payments, you typically will not have a mortgage interest deduction on your income taxes. However, if you need a deduction on a particular year you can pay interest payments whenever you want, thus receiving a 1098 interest statement making that money tax deductible.
How does paid off home affect your property taxes?
Generally, property tax is not determined based on a mortgage. If you owe a mortgage on your home or if it is paid in full, the property taxes will be the same. The difference for you is that you will need to track and pay the taxes yourself, instead of letting the mortgage company pay the taxes from your escrow account.
Who pays real estate taxes on a reverse mortgage?
The owner of the home that still occupies the home and has the reverse mortgage is still responsible for maintaining the home and for paying the property taxes, and all other expenses in keeping the home in good condition.
Where is a reverst mortgage fl?
A reverse mortgage is an FHA approved loan taken out by homeowners 62 years of age and older that is not due until the homeowner is no longer living on the property provided the house is maintained and insurance and property taxes are paid. Some lenders in the state of Florida are: Oasis Reverse Mortgage, Sunvest Mortgage Group, First National Bank, Positive Mortgage Inc., and many others can be found via this website: http://www.reversemortgageadviser.com/florida.html
What if the house is homesteaded and has a reverse mortgage on it and the person is 71 years and widowed living in it is there still property taxes to pay?
Yes unless for some reason that state has a property tax deferral program for certain lower income folks. But the person would need to apply for those benefits and make certain not to let property tax lapse as its a technical default with a reverse mortgage and can lead to forced loan closing or foreclosure.The homeowner is still responsible for all expensesrelating to the home when they obtain a reverse mortgage. That includes taxes, insurance, repairs, maintenance, utility costs, municipal assessments, etc. Their responsibilities are the same as they would be if they didn't have the reverse mortgage. In addition, a homestead is generally subordinated to a mortgage. To confirm that factor you can check the provisions set forth in the mortgage.
Will life insurance pay off a reverse mortgage?
Yes. Even better, it can reduce estate taxes. Without a mortgage, your home's value will be part of your total estate and subject to estate taxes. With a mortgage (reverse or otherwise), only the net equity portion will be added to the estate. The life insurance proceeds will be paid to your beneficiaries free of tax, and can then be used to extinguish the reverse mortgage balance. Many people who need the benefits of a reverse mortgage, but are concerned about "stealing" their kids' inheritance are electing this strategy. Let me give you an example of an arrangement I just helped a lady put in place. She obtained $336,000 from her reverse mortgage. We put that into an immediate annuity, which guarantees her a monthly income for life of $2,800. She is using $1,500 of that to pay the premium on a $500,000 life insurance policy, and the remaining $1,300 per month ($15,300/year - tax free) as additional income. When she dies, the $500,000 should be more than enough to repay the reverse mortgage. That's a great outcome - and one more seniors should look at.
Seniors--Take a Dream Vacation Using a Reverse Mortgage?
After a lifetime of hard work, most seniors want to relax and enjoy their retirement. A dream vacation is the perfect way to start the retirement years. In today’s economy, many seniors cannot imagine that they would ever be able to afford that long-desired dream vacation. However, many seniors have not considered the benefits of a Home Equity Conversion Mortgage, also known as a reverse mortgage. A reverse mortgage allows seniors to access the equity in their property. Often seniors are confused about reverse mortgages. Many believe that the house belongs to the bank once a reverse mortgage is closed. This is not accurate. A homeowner has title to the property the same as with a traditional mortgage. Seniors have several options to consider once obtaining a reverse mortgage. First, the senior has the option of doing nothing other than maintaining the property and keeping the real estate taxes and hazard insurance current. Because there are no monthly mortgage payments with a reverse mortgage, the senior’s monthly expenses are not increased. For seniors with a monthly mortgage payment, a reverse mortgage eliminates those payments. The reverse mortgage does not require repayment until the last surviving senior homeowner dies. At that point, the heirs could repay the mortgage by selling the property—keeping any profit after repayment of the reverse mortgage—or by obtaining a traditional mortgage. If the heirs choose not to do so, they can simply walk away from the property, but they are never obligated to repay the reverse mortgage. Second, the senior can always sell the property to someone else and pay off the reverse mortgage. Having a reverse mortgage does not prevent a homeowner from selling the property, as some mistakenly believe. The homeowner retains title to the property, so the bank cannot prevent the sale of the property. A third option available to senior homeowners with a reverse mortgage is refinancing the property. If the homeowner decides not to continue with the reverse mortgage, the homeowner can refinance the property by obtaining a traditional mortgage. Seniors can take advantage of this unique mortgage product and start packing for that long-deserved dream vacation.
Important Facts About The Reverse Mortgage Program?
The reverse mortgage program was designed to provide senior citizens an additional funding source for their retirement. There are a few requirements that you must meet to qualify for the program. There are also several points you must understand prior to entering into a reverse mortgage agreement. Reverse mortgages can only be applied for if you are 62 years of age or older. You must own a home that has considerable equity. You may have a mortgage on it if the balance is very low. The home must be your main residence. You must continue to live in that home as a full time resident throughout the course of the loan. If you meet these guidelines you can apply for a reverse mortgage. A reverse mortgage is a way for senior to live off of the equity in their home. Borrowers may choose either to receive the money as a lump sum or in monthly payments. Lumps sum payments are generally not encouraged because of the taxes that can be associated with this increase in income. The loan is paid back when the home is sold after you move or die. Heirs to the estate will be given the first opportunity to purchase the home. If they do not want the house it will be put up for sale to cover the debt. If the reverse mortgage was not federally insured any remaining debt will fall onto the estate for payment. Federally insured reverse mortgages are commonly known as Home Equity Conversion Mortgages. The HECM program offers an insurance policy, for a small premium, to guarantee that the debt is covered once you no longer occupy the home. When you are seeking out information about a reverse mortgage it is always well advised to consider a HECM option. During the course of the loan you must maintain the property. Failure to make repairs or upkeep the home could result in a breech of contract. You must also keep all your taxes current. If you fall behind in your taxes the reverse mortgage company could call in the loan. These are very important factors you must keep in mind.
What can homeowners deduct on their taxes?
If you file a Schedule A and Form 1040 return you can deduct your Mortgage Interest, Property Taxes, and Mortgage PMI on your 1098 form from the bank or mortgage company.
Is reverse mortgage taxable?
lots of info on my site on this one, but in short the money you get from the reverse mortgage is not subject to income tax because it is borrowed money, not earned money. this is similar to a home equity line of credit taken out against a home, no income tax is paid on the loan. On the flip side, the interest you pay on a mortgage is tax deductible in the year you pay the interest, not necessarily in the year it accrues. Because a reverse mortgage does not require mortgage payments, you typically will not have a mortgage interest deduction on your income taxes. However, if you need a deduction on a particular year you can pay interest payments whenever you want, thus receiving a 1098 interest statement making that money tax deductible.
How does paid off home affect your property taxes?
Generally, property tax is not determined based on a mortgage. If you owe a mortgage on your home or if it is paid in full, the property taxes will be the same. The difference for you is that you will need to track and pay the taxes yourself, instead of letting the mortgage company pay the taxes from your escrow account.
Is a reverse mortgage a good idea?
It depends on the borrowers financial and living situations. For many a reverse mortgage can help improve the quality of life for seniors. In other cases, a reverse mortgage isn't needed, or can be held off for several years.
What does the bank do with vacant reverse mortgage properties?
The object of a reverse mortgage arrangement is for the bank to sell the property for a profit when the mortgage becomes due. Banks do not sit on vacant properties for long. Generally, if the mortgagor is moved to assisted living or a nursing home the mortgage becomes due. Any non-borrower living in the premises must move out. If a borrower fails to pay the property taxes, maintain insurance or fails to maintain the home, that will result in a default and the lender can foreclose. See related links.
What will happen to your taxes when you own a home?
I think you can deduct your property taxes and the interest on your mortgage!
