I live in Colorado.
Mother-in-law has been very sick over last year.
Mother-in-law owns a home with a $280,000 reverse mortgage growing every year.
House is worth $450,000.
If I buy her home to eliminate the reverse do I pay fair market value or just the $280K.
My wife is the beneficiary and we expect she probably has 5-10 years left to live. Should we just wait until she passes and then pay off the reverse.
1 Answer from Attorneys
Assuming that mother-in-law is mentally competent, you will purchase the house for whatever she is willing to sell it to your for. Paying off the reverse mortgage as part of the transaction is exactly like paying off any other type of mortgage. However, there can be tax advantages to inheriting a property that you don't get if you purchase a property that you are not going to live in. That might affect your decision. You may want to talk to a tax adviser.