Reverse Mortgages - In-depth information from a local Connecticut lender.

Interview with John Luddy
Reverse Mortgage Specialist

John Luddy Interview, Page Two.

What if I end up owing more money than my home is worth?

John's Response:

Reverse mortgages are federally insured to protect senior homeowners from owing more than their home is worth. If you want to sell your home and you owe more than the home is worth, the federal government will pay the difference.

If I take a reverse mortgage, can I spend part of my time in Florida?

John's Response:

Yes, reverse mortgages can only be used on the seniors primary residence. But that is not to say that you can't spend part of the year at a second home or vacation. You cannot be away from the home for more than twelve months, so if you want to spend the winter in Florida that is perfectly okay !

I understand that before I go forward with a reverse mortgage I need to talk to a federal counselor. Why is that necessary?

John's Response:

The federal counseling is an important safeguard for the senior homeowner. They ensure that the senior understands the program and that it is appropriate for them.

I am thinking about a reverse mortgage for my mother, who requires around-the-clock help. Is that a good reason to take a reverse mortgage?

John's Response:

Yes, many of my clients use a reverse mortgage to stay in their home with around-the-clock help so that they can avoid the dreaded convalescent home.

What do you tell folks that are faced with that decision?

John's Response:

I often tell my clients that they have taken good care of their home now it's time to let their home take good care of them!

What do you tell a client that wants to leave something to their children ?

John's Response:

We all want to leave something to our children in the end, and the program is designed to try to leave some equity when the home is sold. We all wish we were like Bill Gates and could leave a huge trust fund to our children. But the reality is, in the end, anything of true value you have already given to your children. Being able to work and take care of yourself is much more important than a few extra inherited dollars.

What has been your experience with children of seniors who were considering a reverse mortgage?

John's Response:

Most children today are concerned that mom and dad are well taken care of, and they not concerned about what they might inherit. Often I hear loving children tell their parents "do what it takes to take care of yourself and be happy".

If I take out a reverse mortgage do I still have to pay my taxes?

John's Response:

Yes, because you always own the home. You are responsible for the property taxes and homeowner's insurance.

How old do you need to be to take out a reverse mortgage?

John's Response:

The senior homeowner needs to be a least sixty-two years old.

Suppose I take a reverse mortgage now, can my wife get on the loan when she turns sixty-two?

John's Response:

Only if you refinance into a new reverse mortgage.

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