Three Common Misconceptions About Reverse Mortgages
Three common areas that are misunderstood are: What happens if I outlive my reverse mortgage? What happens to the inheritance for my family? Does the reverse mortgage bank own my home?
These are all good questions that are fairly simple to answer, however are very important and have lasting implications.
1. Can I outlive a reverse mortgage? The answer is No. There is no loan maturity date nor an age limit. The loan must be repaid when the last surviving spouse has passed away or no longer lives in the property. During that time, there are certain FHA requirements that must be met. This means that the home must be maintained in good condition and the property taxes and homeowners insurance must be paid on time.
As long as these requirements are met, there is no payment required on the loan for as long as the last surviving spouse remains in the home.
2. What about my family's inheritance? Upon the passing of the last surviving spouse, the reverse mortgage loan must be paid in full. If there is equity remaining in the property, the equity will be granted to whomever is designated in the estate or will after paying off the reverse mortgage. The reverse mortgage lender is only entitled to the balance owed at the time of the borrower's passing.
3. Who owns my home? The reverse mortgage borrower always owns the home. Title remains vested in the name(s) of the homeowner(s) and will never transfer to the reverse mortgage lender as long as the FHA requirements are met. This means that the borrower has the right to sell, refinance or payoff the reverse mortgage loan at any time.
If you are thinking about applying for a reverse mortgage or need more information on how a reverse mortgage works, you can click on the link below titled "Can I Qualify?" This will you take you to a free reverse mortgage calculator where you can get instant answers and find out if you qualify for a loan.
Can I Qualify
These are all good questions that are fairly simple to answer, however are very important and have lasting implications.
1. Can I outlive a reverse mortgage? The answer is No. There is no loan maturity date nor an age limit. The loan must be repaid when the last surviving spouse has passed away or no longer lives in the property. During that time, there are certain FHA requirements that must be met. This means that the home must be maintained in good condition and the property taxes and homeowners insurance must be paid on time.
As long as these requirements are met, there is no payment required on the loan for as long as the last surviving spouse remains in the home.
2. What about my family's inheritance? Upon the passing of the last surviving spouse, the reverse mortgage loan must be paid in full. If there is equity remaining in the property, the equity will be granted to whomever is designated in the estate or will after paying off the reverse mortgage. The reverse mortgage lender is only entitled to the balance owed at the time of the borrower's passing.
3. Who owns my home? The reverse mortgage borrower always owns the home. Title remains vested in the name(s) of the homeowner(s) and will never transfer to the reverse mortgage lender as long as the FHA requirements are met. This means that the borrower has the right to sell, refinance or payoff the reverse mortgage loan at any time.
If you are thinking about applying for a reverse mortgage or need more information on how a reverse mortgage works, you can click on the link below titled "Can I Qualify?" This will you take you to a free reverse mortgage calculator where you can get instant answers and find out if you qualify for a loan.
Can I Qualify
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