What Happens When You Move Out?

What happens should I have to move out of my home into a nursing home, or even to stay with family, and I have a reverse mortgage?

Answer:

For people who have a reverse mortgage and you no longer live in your Corvallis Oregon home for the majority of the year, or if you will need to move out of your house for medical-related reasons for in excess of 12 sequential months, you may need to repay the reverse mortgage loan, which could require selling your home in Corvallis OR

Most reverse mortgages funded in Corvallis are Property Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. A HECM loan will have to be repaid entirely as soon as the very last surviving borrower or eligible non-borrowing spouse dies or completely moves away from the property.

Any situation in which you’ve resided someplace else for a majority of the year, or beyond 12 continuous months for medical reasons – including a nursing home or assisted living facility – will be considered a “permanent move.”

So what does this mean in practice? Use this list to look up your circumstances:

When you are the sole borrower on the HECM and:

You live by yourself , the loan will need to be paid back if you move someplace else for the majority of the year, or to a nursing home or assisted living facility for more than 12 continuous months. This could require selling your house to pay back the mortgage loan.
You live with a husband or wife, the loan will need to be repaid if you move some other place for a majority of the year, or to a care home or assisted living for over 12 sequential months.

Warning: That will probably require selling your property, and your partner will probably have to move.

You live with children, other relatives or unrelated room mates, your mortgage loan will have to be repaid if you move some other place for a majority of the year, or to a elderly care facility or assisted living over 12 continuous months.

Warning: This will likely require selling your property, and your children, relatives or roommates will in all probability have to move.

If you’re a co-borrower on the HECM reverse mortgage in Corvallis OR and:

You live by yourself because your co-borrower has passed away or already resides someplace else, your loan has to be paid back if you move some other place for a most of the year, or to a elderly care facility or assisted living care facility for more than 12 continuous months.

You reside with a spouse who’s a co-borrower on the reverse mortgage, your co-borrower could reside in the property if you move some other place for the majority of the year, or to a elderly care facility or assisted living. But if your co-borrower needs to move out too, either because she or he no longer lives in the home for the most of the year or in excess of 12 consecutive months because of medical related reasons, your mortgage loan needs to be paid back.

You live with other relatives or unrelated roommates. If the co-borrower still resides in the house, your other relatives or roommates could live there too once you move to a elderly care facility or assisted living care home. However, if your co-borrower also no longer lives in the home for the most of the year or for longer than 12 continuous months on account of health care factors, your loan needs to be paid off.

Caution: This will most likely require selling the home, and your relatives or roommates will probably have to move.

Usually, co-borrowers are husbands and wives or partners.

Co-borrowers are treated the exact same whether they are spouses, partners, relatives or just roommates.

The majority of borrowers  will probably need to sell their home in order to repay the reverse mortgage. With an FHA-insured HECM loan, when the mortgage loan balance is more than your property is appraised for, you don’t have to pay the excess. When you sell the home, the lender takes the proceeds from the sale as payment on the loan, and the FHA insurance will take care of any remaining mortgage loan balance.

If you would like to keep your house instead of selling it, the loan must be paid back with another source of funds. But you won’t have to pay more than the full loan balance or 95 percent of the home’s appraised value, whichever is less.

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