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When to pay back reverse mortgages

Posted on: 26th Mar, 2004 03:54 am
Reverse mortgages are payable only when the last surviving borrower dies, sells the property, permanently moves out or when he reaches the end of the loan period. A permanent move is implied when you, the co-borrower, or a qualifying relative has occupied the home for at least 1 year. If you die, the lender will not be able to take the title if your heirs can repay the loan.

When the loan may be in default


The loan will be in default if:
  • You or the co-borrower have filed bankruptcy.

  • The borrower donates or abandons the home

  • You haven't paid property taxes

  • You haven't maintained your home or paid for repairs

  • Your home is no longer insured
Moreover, if the loan has an acceleration clause , the lender may require you to pay down the mortgage if:
  • A co-owner has been added to the property title

  • You have rented out the property to a non-relative

  • You have taken a new loan on your home

  • You have changed the property's zoning classification
Make sure you check the loan documents so you know what situations will cause your loan to default and your repayments to accelerate.
Related Articles

a few years ago my mother got a reversed mortgage on her home. she now has the money she needed back then. is it possible for her to pay back the money she received and get out of the second mortgage.
Posted on: 18th Oct, 2008 08:41 am
Hi Jd!

She should look if there is a pre=payment penalty attached with the mortgage. If no then she can pay off the mortgage right away.

Thanks.
Posted on: 20th Oct, 2008 03:57 am
My home mortgage is in my Mother's name and she died unexpectidly. What do I do to keep my home?
Posted on: 26th Feb, 2009 01:18 pm
What to do when Mother dies and home is in her name
Posted on: 26th Feb, 2009 01:23 pm
hi cindy,

if your mother died having left a will, the property will go through probate. but if there's no will, you need to file an affidavit of heirship with a probate court so your mother's name is removed and you become the owner of the house. once the title has been changed in your name, you can refinance it in your name.

thanks,

jerry
Posted on: 27th Feb, 2009 03:44 am
My husband and I are on the title of his mother's house. The house is paid off and she would like to get a reverse mortgage. For other reasons- I am considering divorcing my husband. Should I take my name off the title before they do a reverse mortgage? How will this impact my credit if my name stays on the title. Can I force a sale when their is a reverse mortgage to get my share of the estate?
Posted on: 03rd Mar, 2009 08:40 am
wow

so you want to be sure you get your share of your mother in law's estate? shoot her now, why don't you?

if you and your husband are owners of a home on which his mom is trying to get a reverse mortgage, i'm doubtful that a lender can make the transaction work. that is, unless you and he are at least 62 years of age.

i hate to be so direct in my response, but your closing certainly doesn't show a whole lot of heart.
Posted on: 03rd Mar, 2009 12:10 pm
I should have clarified- My husband and I have been paying off her $ 50,000 debt for the past few years. Debt she incurred by stealing his SS# and purchasing unnecessary items (shopaholic). We weren't aware of said debt until we purchased a home together. Obviously we weren't prosecuting but we almost lost the house we were purchasing. That is the only reason why I'm interested in the estate- I would like to get that money back (Also, I am the one that paid for most of her debt). I'm not heartless. I just don't feel his mother should be my responsibility especially if we divorce. Make sense? I don't want half or anything- I just want what is owed to me.
The three of us are on the title but she has lived there for 5 years. My concern is the three of us on the title- more debt in my name (being another type of mortagage). Is it just worth it to let the whole title go and most likely not be reinbursed for the debt I paid in her name or hold on to the house even though it will show on my credit? And yes- they are giving her a reverse mortgage because she spent more than four years in the house and is on the title with us. However, I have to sign off on it. The question: do I sign or just take my name off the title? Also, she has no other income.
Posted on: 03rd Mar, 2009 01:08 pm
i truly cant answer the question of whether it's worth letting the "whole title go" as you said. that's a decision you'd need to make.

what i'm missing is how a lender can provide a reverse mortgage to anyone on title who is less than 62 years of age. that would be a major stumbling block - you may want to check into the validity of what's taking place (fraud abounds in the united states). as for appearing on your credit, if you are going to be a borrower; then yes, it will appear. you will "sign off on it." is that the note?
honestly, i can't answer your question about whether you should or you shouldn't. there's a whole lot here that i've got no business thinking about (the divorce, the shopaholic thing), and all those things would certainly have to be in your mind when you make a final decision.

let's just pray you make the right decision, whatever that may be.
Posted on: 03rd Mar, 2009 01:52 pm
I'll continue researching the lender. The way it was worded to me: the three of us have the title but the reverse mortgage is in her name.
In the end I may just take my name off the title. No benefit but no detriment either.
Posted on: 03rd Mar, 2009 04:14 pm
Posted on: 05th Mar, 2009 10:11 am
if you quit claim your interest in the property to him, you relinquish all of your rights to the property. if he then gets a reverse mortgage, the lender will provide him with either a lump sum payout or monthly payments, which would be income for him. reverse mortgages are payable on death or at the time of a sale. no repayment is necessary during the life of the loan itself.

as for "who gets the property" - once you sign a quit claim deed you're out of the picture. whatever his estate reflects would become the reality.
Posted on: 05th Mar, 2009 11:03 am
my father has passed away and has a reverse mortgage, if we let it go to foreclousre will it hurt us kids credit?
Posted on: 15th Mar, 2009 07:01 am
Hi joni,

As the property and the reverse mortgage was in your father's name, I don't think your credit will affected if the property goes into foreclosure.

Thanks
Posted on: 15th Mar, 2009 10:01 pm
Can you sell your home with a reverse mortgage on it?
Posted on: 27th Mar, 2009 08:31 am
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