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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

Hi,

You can sell your current primary residence. But you'll have to pay off the reverse mortgage with the sale proceed. You will be able to take reverse mortgage on your second home, provided you use it as your principal place of residence.
Posted on: 24th Dec, 2009 05:43 am
>>Will I then be able to take out a reverse mortgage on that home?

Yes
Posted on: 24th Dec, 2009 09:21 am
>>since we paid off the debt, are me and my husband entitled to have the deed in our name?

No. The property will be provided to the heirs as per your Parents Will or Living Trust.
Posted on: 24th Dec, 2009 09:24 am
We have a condo with a reverse mortgage and a second vacation home. We are considering moving to the vacation home and we understand that we will need to sell the condo per the reverse mortgage rules. Since the real estate market for our condo has dropped, what happens if we do not get enough to pay off the mortgage.
Posted on: 25th Jan, 2010 07:59 am
>>what happens if we do not get enough to pay off the mortgage

It's a non-recourse mortgage, so you're not responsible for any loss. If the condo is worth $200k and you owe $300k, you're not responsible for the $100k loss. The lender will file a claim against the insurance to recover the difference.

The insurance premium is the only thing that enables a HUD sponsored Reverse Mortgage to work. People complain about the high fees to enter into a Reverse Mortgage, but the highest fee is usually the insurance premium - but it sure comes in handy when it's time to use.

After you move into your vacation home, you can get a Reverse Mortgage on it too.
Posted on: 25th Jan, 2010 08:12 am
my son inlaw grandfather died, and his grandmother is being force out of her house because of his death. she was told if her spouse did died they would not be a problem with the reverse mortgage. Why is she being force to leave her home.
Posted on: 16th Mar, 2010 11:47 am
>>Why is she being force to leave her home.

I'd like to know the answer to that too. If she was on Title when they got the Reverse Mortgage, she's not being forced to move because of the Reverse Mortgage. Why did they say she has to move?
Posted on: 16th Mar, 2010 01:13 pm
my mother took out a reverse mortgage in September of 2009 and she would like to sell the home to me. How can we go about doing this? any advice is greatly appreciated so we can start the process
Posted on: 10th Apr, 2010 03:18 pm
if my daughter makes payments toward my reverse mortgage can I tranfer the title in her name while she is doing this I took out a reverse mortgage last year. If not, I would like to sell the house to her please advice on how I can do this
Posted on: 10th Apr, 2010 03:29 pm
if you transfer ownership to her now, you'll activate the due on sale clause, and you'll have to repay the reverse mortgage in full immediately. it may be better to prepare a will and name your daughter as beneficiary. check with an estate attorney about this, though.
Posted on: 10th Apr, 2010 05:06 pm
The best thing to do is provide her Title via your Living Trust.
Posted on: 10th Apr, 2010 05:47 pm
My great grandmother has a reverse mortgage her husband the co-loaner has pasted away. I am her power of attorney and the next in line to get the house should I stop it now and start paying it back and how long after one she has pasted will they give me to pay the loan off????
Posted on: 16th May, 2010 12:30 am
hi nicole,

you should inform the lender about the death of co-signer of the loan and stop the reverse mortgage. you can apply for a refinance of the loan in order to save the property from foreclosure. you will get around 3 months time to refinance the reverse mortgage.
Posted on: 17th May, 2010 01:04 am
My mother's house is on the market and not selling as quickly as she needs it to. She has some debt that needs to be paid off and can no longer afford the high taxes. However, she doesn't want to give the house away for a song as it's in a highly valued area.
Is a reverse mortgage a good option to buy her some more time so that she can get a good price for her house?
Also, is there a company that you recommend for seniors?
Thanks
Posted on: 12th Jun, 2010 07:23 pm
>>Is a reverse mortgage a good option to buy her some more time so that she can get a good price for her house?

Only if she can get one with low fees. A Reverse Mortgage usually isn't a good short term solution, because it normally has high fees. But right now you can get one and only have to pay one fee - the FHA insurance premium.

>>is there a company that you recommend for seniors?

My company is iReverse Home Loans, and I've helped several homeowners here at mortgagefit with their Reverse Mortgages. My cell is 949-400-1729 and my website is www.ResponsibleReverseMortgages.com - I'll be glad to answer your questions.

Raymond
Posted on: 13th Jun, 2010 09:50 am
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