What Responsibilities Do I Have If I Take Out a Reverse Mortgage?

Maintaining a reverse mortgage is easy if you follow a few common sense guidelines. Repayment is not required so long as you choose to live at home.

Reverse mortgages are low risk, non-recourse loans. Repayment is not required until the last remaining spouse vacates your home. Foreclosure, late fees and creditor calls are not an issue. You do have several requirements to maintain your loan in good standing. These requirements are simple. So long as these conditions are satisfied, you may remain in your home for as long as you like and receive monthly checks.

Reverse Mortgage Basics

The documents signed when funding a reverse mortgage include homeowner requirements. The requirements are reasonable and protect property value. You must maintain your home in good condition and perform ordinary repairs. You must maintain hazard insurance to protect against fire, storms and potentially floods. You must make sure all taxes remain current. If you satisfy these three basic requirements, your loan is safe and you may continue receiving a check each month.

Additional Considerations

To avoid triggering repayment of a reverse mortgage, homeowners should not leave their home vacant for 12 months or more. In most circumstances, this requirement is not a cause for concern. However, if you intend to travel extensively during retirement, make sure to occupy your home on a regular basis.

Repayment

When the last spouse vacates your home, repayment of a reverse mortgage is required. The amount of repayment is limited to home value. This feature is unique to non-recourse loans. Homeowners and heirs are not personally responsible for payment, and may choose to surrender the home in full satisfaction of all debt. Alternatively, if your home is worth more than the loan balance, repayment is acceptable from any source. Before repayment, homeowners may remain in the home and continue receiving checks up to the approved loan balance.

Related posts

1. Can I Get a Reverse Mortgage If I Already Have a First/Second Mortgage?
2. Can I Sell My House If I Have a Reverse Mortgage?
3. How Much Am I Entitled To Receive Through A Reverse Mortgage?
4. Where Can I Find More Information About A Reverse Mortgage?
5. What Happens To My Reverse Mortgage If I Go To A Nursing Home?

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