When Do You Payback A Reverse Mortgage?

Answer:

Reverse home mortgages usually are due and payable after you die, but might will need to be repaid earlier in the event you do not make use of the house for your principal home, or neglect to pay taxes or insurance protection, or take care of needed repairs.

Nearly all reverse mortgages offeredare Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. A HECM mortgage loan needs to be repaid as soon as the last living borrower or eligible non-borrowing spouse dies. The mortgage also results in being payable when the last surviving borrower sells the house or permanently moves out.

An important requirement of a HECM is you live in your property as the principal home. As soon as the house is no longer your principal residence and you are the sole borrower, the loan will become due.

Each calendar year, you are required to certify in writing that you inhabit your house as your primary residence.

Keep in mind that the house will not be thought of as your principal residence if one of the following circumstances is applicable:

You’re away for the majority of the year for a non-medical reason; or
You’re absent for more than 12 sequential months for a medical reason

When you have a co-borrower, your co-borrower can keep on living in the home – and the mortgage loan won’t become due – even if you pass away or move out of the property.

A reverse mortgage loan also becomes due if you stop paying your property taxes or homeowner’s insurance, or do not maintain the property in good repair.
TIP:

Should you receive notice that you’re in default for failure to reside in the property as your principal residence, pay property taxes and insurance coverage, or make necessary repairs, you should speak to your loan provider or servicing company as well as a HUD-approved HECM default counselor (which will not charge a fee) or an lawyer or attorney immediately.