What Happens To My Reverse Mortgage If I Go To A Nursing Home?
Going into a nursing home allows the homeowner to either pay the reverse mortgage off or the lender will sell the home to satisfy the loan balance.
Reverse Mortgage Guidelines
Seniors who have qualified for a reverse mortgage may reside in their home until it becomes necessary to have supervised living assistance or the last surviving homeowner passes away. If the last homeowner goes into a nursing facility, the lender guidelines allow a 12 month window for repayment or the home will be sold as stated in the reverse mortgage loan agreement. The mortgage is rendered paid in full even if the sale of the home falls short in paying off the remaining balance of the loan. Any profit that is made over the amount owed will be returned to the homeowners or deposited in their estate.
Reverse Mortgage Facts
The interest rate in a reverse mortgage is calculated based on the age or ages of the homeowners. The property to be considered for this type of loan must be free and clear of an existing mortgage or have accrued enough equity to qualify for a reverse mortgage. The homeowners are no longer making mortgage payments. Instead, the home’s equity is distributed back to the homeowners in the form of tax-free monthly payments, one lump sum payment, or through a credit line.
Earning Income With a Reverse Mortgage
Most seniors consider a reverse mortgage as a means of having a portion of their mortgage payments returned. With the rising cost of health care, older homeowners need supplemental income to take care of additional medical expenses during their years of retirement. This is a well deserved benefit that serves older Americans well. They are able to maintain a home and financial security while living independently for as long as possible.
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