Most reverse mortgage loans must be repaid either when you vacate the property or when you pass away. However, the loan might need to be repaid sooner if the house is no longer your primary residence, you don’t keep it in good repair, or you don’t pay your homeowners insurance or property taxes.
Most reverse mortgage loans are Home Equity Conversion Mortgages (HECMs). When the final surviving borrower or eligible non-borrowing spouse:
If there is no co-borrower residing in the home and you are away for more than 12 consecutive months in a healthcare facility (such as a hospital, rehabilitation center, nursing home, or assisted living facility), anyone living with you must leave unless they are able to repay the loan or are an Eligible Non-Borrowing Spouse.
Your spouse is referred to as an “Eligible Non-Borrowing Spouse” if they meet the requirements of the U S. regulations set forth by the Department of Housing and Urban Development (HUD) for surviving family members
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FAQ
How long do heirs have to pay off a reverse mortgage?
The loan becomes due and payable upon the demise of the borrower and Eligible Non-Borrowing Spouse. After receiving the lender’s notice that the debt is due and payable, your heirs have 30 days to settle the debt by purchasing, selling, or returning the property to the lender.
What is the downside to a reverse mortgage?
The loss of home equity is one of reverse mortgages’ major drawbacks. You’ll make less money when you sell the property or have less borrowing power if you need a new loan because you’re not reducing the balance of your reverse mortgage. You’ll pay high upfront fees.
Do you have to repay a reverse mortgage?
Most reverse mortgage loans must be repaid either when you vacate the property or when you pass away. However, the loan might need to be repaid sooner if the house is no longer your primary residence, you don’t keep it in good repair, or you don’t pay your homeowners insurance or property taxes.
What do you pay monthly on a reverse mortgage?
Due to the fact that the loan balance doesn’t become due until the final borrower vacates the property, dies, neglects to pay taxes or insurance, or fails to maintain the property, you are not required to make monthly payments on the reverse mortgage.