What Happens to My Home When I Die If I Have a Reverse Mortgage?
Clear, concise answers to your questions about how a reverse mortgage will affect your heirs after your death.
Many senior citizens today are considering taking advantage of a reverse mortgage. This program allows homeowners over the age of 62 to receive a monthly loan payment as long as they live in their house. The loan is not payable until after the senior moves or dies. Many seniors are able to live at home for 30 or more years, leaving their heirs with a substantial debt to pay off after their death. Before agreeing to a reverse mortgage, these people should be aware of the obligation they are leaving behind.
A REVERSE MORTGAGE BECOMES PAYABLE UPON DEATH OF THE LAST SURVIVING SPOUSE
According to law, if your spouse outlives you, the reverse mortgage transfers to her. However, once he dies, the loan becomes payable. As soon as your lender becomes aware that you and your spouse are deceased, your heirs will be given one year to resolve the debt.
KEEPING THE HOUSE
If your heirs wish to keep the house, they will have to pay off the loan in full within a year. Unless you have also bequeathed them a substantial sum of money or they are independently wealthy, this is going to be difficult. It is most likely that your heirs will have to sell the house in order to resolve the debt.
OTHER OPTIONS TO PAY OFF A REVERSE MORTGAGE
If your heirs cannot afford to pay off the loan, there are two other options. They can sell the house to pay off the loan or sign the house back over to the bank. If they sell the house, they can keep any proceeds beyond the amount owed to your lender.
DEFAULT LEADS TO FORECLOSURE
Some heirs may be tempted to ignore the loan. However, if they do this, the house will enter foreclosure just as it would if they refused to pay a traditional mortgage. In this case, they would harm their credit rating as well as losing the house.
Related posts
- Can Children Be Held Responsible for a Reverse Mortgage of Deceased Parents?
- Are There Any Risks Of Taking Out A Reverse Mortgage?
- Will I Still Continue to Own My Home If I Take Out a Reverse Mortgage?
- What Happens to My Reverse Mortgage if I Become Ill?
- Who Owns My House If I Have a Reverse Mortgage?
One Response to “What Happens to My Home When I Die If I Have a Reverse Mortgage?”
Leave a Reply
Send this page to a friend ...
I’m confused!!
Your website states: “A REVERSE MORTGAGE BECOMES PAYABLE UPON DEATH OF THE LAST SURVIVING SPOUSE
According to law, if your spouse outlives you, the reverse mortgage transfers to her. However, once he dies, the loan becomes payable. As soon as your lender becomes aware that you and your spouse are deceased, your heirs will be given one year to resolve the debt.”
If the MAN dies and the “mortgage transfers to her,” and “once HE dies, the loan becomes payable.” Say what? This is confusing!
Don’t you mean “once SHE dies, the loan becomes payable?”
Please recheck what you have written so as not to sound like a scam.