What is a deferred payment loan agreement?

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What is a deferred payment loan agreement?

My mother has a deed with her 3 children on it and I have been given papers to sign which is a “deferred payment loan agreement”. I was told that the amount does not have to be paid back only if she dies, is this true?

Asked on July 5, 2011 under Real Estate Law, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Please do not sign anything unless and until you have someone read them on your behalf.  I think what may be happening is that your Mother is taking out a reverse mortgage on the property, which is a mortgage base upon the equity in the house and that has to be paid when the person passes away.  Generally speaking what happens is that the house is in the decedent's name and the estate sells the property when they pass away paying off the loan.  Who initiated the loan here?  Was it your Mother or your siblings?  Is the money going to your Mother?  Please be careful because if you are to inherit the property - or you think that you are - signing the document could mean that if you can not repay the loan then you will have to sell the house.  Get help.  Good luck.


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