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 or last surviving eligible non-borrowing spouse
• Upon sale of the home by the homeowner
• If the homeowner lives elsewhere for more than six consecutive months (Twelve consecutive months if medical related, i.e. assisted living home)
• Upon an instance of default.

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

• Proceeds from the sale of the home used to pay it off, with the remaining equity going to the borrower and/or heirs.
• The homeowner or heirs of the homeowner can refinance the loan.
• The heirs or home owner can simply send the full payoff to the mortgage servicer, thus extinguishing the debt and lien.

Like all loans a reverse mortgage loan does carry conditions in order to remain valid. Reasons a borrower may find themselves in default include:

• 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 by the government

To apply for your reverse mortgage loan click here.

These materials are not from HUD or FHA and were not approved by HUD or a government agency.