What about repaying Reverse Mortgage Loan?

The very nature of a reverse mortgage loan can be confusing. With a reverse mortgage loan, lenders pay you either in monthly installments, with one lump sum, a line of credit or as a combination of a line of credit and monthly installments. The following lists provide information regarding repayment of a reverse mortgage loan.

A reverse mortgage loan comes due when under the following conditions:

  • Death of the homeowner
  • Upon sale of the home by the homeowner
  • If the homeowner moves out of the home and lives elsewhere for 12 consecutive months (i.e. assisted living home)
  • Upon one of the instances of default listed below.

When the reverse mortgage becomes due there are two options for paying it off.

  1. The reverse mortgage loan is to be repaid with interest by the borrower or the borrower's heirs using proceeds from the sale of the home.
  2. The heirs of the homeowner can refinance the loan to payoff the mortgage note holder of the reverse mortgage.

Like all loans a reverse mortgage loan does carry conditions in order to remain valid. Below is a list of reasons for which a borrower would find themselves in default.

  • Failure to pay property taxes
  • Failure to keep the home in good repair
  • Failure to insure the home
  • Taking of new debt on the home
  • Bankruptcy
  • Abandonment or donation of the home
  • Eminent domain

To apply for your reverse mortgage loan click here.