Does The Lender Get the Home?

If I sign up for a reverse mortgage loan, does the mortgage provider own my house?

Answer:

No. When you take out a reverse house loan, the title to your house stays with you.

In the event you move out, sell your home, or the last surviving borrower or eligible non-borrowing spouse passes away, you or your estate will have to pay off the HECM mortgage, but you’ll never have to pay above the value of the house.

The reverse mortgage loan balance will include the total amount you have received in cash, plus the interest and fees that were added to the loan balance each month. To repay the home loan, you or your heirs may have to sell the property.

The majority of reverse mortgages are Home Equity Conversion Mortgages (HECMs) in city state. The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. Like a conventional mortgage, with a HECM you are borrowing funds and utilizing your home as security for the reverse loan. You must still pay for property taxes, homeowner’s insurance, and make repairs necessary to maintain the property or the mortgage lender can foreclose on the house. HECMs additionally require that you utilize the property as the principal residence.

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