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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

yes...the loan would simply be paid off at the time of sale.
Posted on: 27th Mar, 2009 08:32 am
How can you make monthly payments on your reverse mortgage to pay down the debt?
Posted on: 28th Mar, 2009 11:25 am
Welcome vickie,

As far as I know, once you no longer live in your house or if you sell your home, then you or your estate will repay the mortgage along with the interest and closing costs. If you want to start paying off the debts now, you need to contact your lender and discuss your options.
Posted on: 29th Mar, 2009 11:17 pm
If someone gets a reverse mortgage based on the current value of their home and has it for 10 years, is it possible to pay it off and get a new reverse mortgage based on the increased value of your home?
Posted on: 03rd Apr, 2009 07:35 am
that sounds reasonable, elle...if i get a chance to check into it, and find out for certain, i'll keep you posted.
Posted on: 03rd Apr, 2009 11:37 am
what if your house sells for more than you recieve from the reverse mortg
Posted on: 08th Apr, 2009 04:50 pm

If your house sells for more than the reverse mortgage amount owed on the property, the reverse mortgage including interests and closing costs will be paid off first and the excess money will go to you or your heirs.
Posted on: 09th Apr, 2009 04:29 am
My wife's dad passed away 1 1/2 years ago and he had a reverse mortgage. We faxed over the death certificate to the reverse mortgage companygiving them full rights to the property since it is worth less money now. Then about 8 months ago we faxed to Bank Of America her dad's death certificate stating he had a reverse mortgage and we do not want the house. Now in the mail we receive an attorney's letter that they are suing the family for the money owed. The only name on the title was her dad's name. He had no money in his estate. How can we be repsonsible or is this something they have to do before foreclosure.
What do we do? I appreciate your help.
Posted on: 12th Apr, 2009 02:29 pm
Hi excitingguy,

If your father in law is the only person on the title and he had a reverse mortgage on the property, upon his death the property would be sold to pay off the reverse mortgage. If there is any excess amount that would go to the heirs. But there is no way the heirs could be held responsible for the deficient amount arising out of the sale of the property. Thus I think this is just a routine process before they foreclose on the property. However, you can always consult an attorney if you have any doubts.
Posted on: 14th Apr, 2009 12:18 am
i'm not sure just how "routine" this is, but you need not be held at fault for a debt that your now-deceased father in law incurred on his own, using his own property as collateral.
Posted on: 14th Apr, 2009 09:39 am
What speciifically needs to be paid back?
Posted on: 24th Apr, 2009 07:09 am
mustang, what would need to be paid off is the mortgage - the amount of money advanced to whoever is the borrower.
Posted on: 24th Apr, 2009 08:38 am
If an adult child lives with a parent in a home on which there is a Reverse Mortgage, and the parent dies, must the adult child move or pay off the Reverse Mortgage
Posted on: 06th May, 2009 08:27 pm
Hi Janet,

If there is a reverse mortgage on a property and the parents die, the mortgage has to be paid by the their children living in the property. If they cannot afford to pay off the debt, the lender will sell off the property to satisfy the reverse mortgage amount.


Posted on: 08th May, 2009 05:20 am
My mom passed away in March and she had a reverse mortgage. Because of the market, her home is worth less than what the payoff is so we decided to just let the lender take it back. The executor of her accounts is not releasing any funds from her estate because he is telling us that the mortgage company is forcing him to leave on utilities until they are finished with their inspections. He says we are looking at another 2 - 3 months at least. Does this sound right?
Posted on: 08th May, 2009 10:11 am
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