How does a home equity loan work?
My mom is losing her memory but is so far behind on bills like property taxes. My cousin asks me about them but I can;t see how we can pay them except to get a loan of some type. My mom has a paid off house worth $150,000. Do I get a home equity loan through my local bank and does it sound like we should get one?
- goz1111Lv 77 years agoFavorite Answer
I think the family and mom need to speak with an estate planer ASAP, basically just because the home is owned free and clear, does not mean mom can get a loan on the property, she still needs to have income and a decent credit score
But even if you get a loan, will it change mom’s circumstances? From your post it seems she does not have enough income to support the home up keeping , if the case it maybe best to sell the home, move mom into a smaller home or rental and use the extra monies from the sell to support mom’s lifestyle
- Dan BLv 77 years ago
You'd better do something, FAST. Your mother can lose the home to a tax sale if the taxes are not paid. That's $150,000 of her money and your inheritance that will go down the toilet. Whoever buys the home will make $150,000 minus the back taxes as a profit. They will probably make about $145,000 on the tax sale.
Check with a bank or lender about getting the loan.
Then get someone, a TRUSTED someone, appointed as Power of Attorney with limited authority to handle her financial affairs. This should be limited to making deposits and writing checks and paying her bills from her checking account. It may be beneficial to set up an automatic payment for the loan and other essential bills. For the past 20 years or more, I've my essential bills automatically deducted (mortgage, utility, car payments) so that they are paid on time, every time. Helps credit score to when all the debts are paid on time, every time. Never had a problem