What Happens to My Home When the Reverse Mortgage Comes Due?

Senior homeowners ask what happens to their properties once they get their reverse mortgage loans. Will they lose them to foreclosures someday?
What Happens to My Home When the Reverse Mortgage Comes Due

Some homeowners have preconceived notions about reverse mortgage loans. For example, they fear
that once they get their reverse mortgage the bank owns the home, or the bank takes their home when they pass away. Of course neither of these is true.
Here’s what you need to know about what happens to your house during and at the end of a reverse mortgage.

The House Stays in Your Name Throughout the Entire Life of the Loan

When you get a reverse mortgage loan the title of your home stays in your name. It is just like a traditional mortgage in that there is simply a lien filed
against the property the same as any other home loan. The major difference between a traditional loan and a reverse mortgage is that there are no monthly
mortgage payments required with a reverse mortgage. However, since the home stays in your name, you are still responsible to pay all of your own property
taxes as well the as the homeowners insurance and any maintenance.

You will receive monthly statements but you do not need to make any mortgage payments once the reverse mortgage is in place. If you want to, you can make
a payment, but the statements are purely informational in nature. One time per year you will get a letter that you have to sign and return stating
that you are still living in the home as your primary residence. That is a requirement for you to keep the loan in place.

What Happens to Your Home If You Move Our or Pass Away?

The reverse mortgage loan only becomes due and payable when the last borrower permanently leaves the home. That can be from passing away or simply moving
out for any reason. If you have to move out of the home for any reason, you simply sell the house. You pay off the amount owed plus the interest and
fees that have accumulated over the years. Whatever is left after paying off the reverse mortgage is your equity and you keep it.

If you pass away while living in the home, your heirs will inherit the home. They have six months, plus two 90 day extensions, for a total of a year to
either sell the home and pay off the loan or refinance the reverse mortgage with a conventional loan and keep it in the family.

As long as you are living in the home and keeping up with the property taxes and insurance, the home is yours and you never have to make a mortgage payment
on the reverse mortgage. However, you are still charged interest and mortgage insurance. These are added to the loan balance on a monthly basis and
accumulate over time. In other words, your loan balance is increasing and your home equity (the difference between the value of the home and the amount
owed), is decreasing.

There is a chance that the loan balance could exceed the value of the home. If that happens and you owe more on the loan than the home is worth, it makes
no difference as long as you are living there and paying your property taxes and insurance and maintaining the home. The bank can never kick you out
as long as you are doing these.

If you pass away with the loan balance exceeding the value, the home still goes to your heirs. They do NOT have to pay the loan back. Because there is
mortgage insurance on all FHA insured reverse mortgage loans, they can simply sign the home over to the bank and walk away. The bank has no recourse
on you, your estate or your heirs.

The intent of the reverse mortgage is to allow you to stay in your home for as long as you want to or are able to and still maintain your standard of living.
A reverse mortgage may or may not be right for you, but please learn the facts to make an informed decision first.

Sources:

“If I take out a reverse mortgage loan, does the bank own my home?” ConsumerFinance.Gov

“Most Frequently Asked Questions,” ReverseMortgage.Org

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Bruce Simmons

I absolutely love what I do - working with senior homeowners to help them live a more comfortable, flexible and secure retirement. I have the absolute best customers in the world, and even though I worked in the forward mortgage business for a number of years, I could never go back to doing conventional loans. I'm a 100% reverse mortgage specialist.

5.0

My wife and I are retired and had a mortgage that was quite high. We contacted Bruce regarding a Reverse Mortgage and were pleased with his knowledge and experience. He made the whole process very easy and explained everything along the way. Since then, I have had a couple of questions and contacted him regarding the RM. Bruce has always been very responsive and returned our calls within minutes. We couldn't be happier having used Bruce for the Reverse Mortgage and highly recommend him.

Bruce has been serving my interest over and above what one might expect during the whole process of handling my reverse mortgage dating back to 2010 and continues to be available at present whenever a question may arise. He is one of the most reliable, trustworthy and knowledgeable experts regarding reverse mortgages that I have had the privilege to do business with! I would highly recommend Bruce to anyone who is considering a reverse mortgage. Thank you Bruce!

I met Bruce from a referral who just love what he did for them on their Reverse Mortgage, So I contacted Bruce and told him my story and he came up with a great Reverse Mortgage for me and my needs and now I am living good and not worrying about Finances anymore. He had it done in a timely manner. If you are looking for the MAN to help you get the best Reverse Mortgage you need to call him and hope you let him help you.

Bruce is one of the most professional, knowledgeable and efficient experts I have worked ŵith ever in any field. He is fast to answer and always ready to help...and he's a great guy!

Gerald Cook
Gerald Cook
5.0

Bruce did our original reverse mortgage and has also refinanced it twice. He works hard to get the best deal possible while making it as easy for us as possible. When our first refinance received a low initial appraisal, Bruce helped the appraiser find better information and increase the appraised value. He's the best.

I was hesitate about getting a reverse mortgage until Bruce Simons put my mind at rest. He is easy to work with, extremely knowledgeable and efficient. Things get done and he will make sure that you understand every part of the process. I interviewed several other people and he was hands down.....The only choice.

Doing a Reverse Mortgage is a major decision, when working with Bruce he came out personally to go over every thing in detail, there was no pressure to finalize the transaction, I had even put the loan on hold for awhile even though I had locked in my rate, I had called Bruce off and on for a few weeks to ask questions that I had concerns about and he was always available to talk to me. In the end it gave me time to feel comfortable about my decision to move forward with the Reverse. Bruce was very pleasant to work with and would certainly recommend Bruce if you are going to consider a Reverse Mortgage.

Bruce Simmons at American Liberty is one of the best in the reverse mortgage industry. I have known and worked with him for years and he always does a great job. You are in good hands with Bruce and know that he will take good care of you or your loved ones every step of the way.

Best thing I ever did! Bruce Simmons at American Liberty Mortgage is the best. He is always there to answer your questions, and can easily explain the whole idea of a Reverse Mortgage. He takes the time and goes through the entire process with you. It worked out so well for me. Thank You Bruce!

We had researched Reverse Mortgages for 5 years and after hearing about Bruce Simmons and meeting with him, we finally decided to move forward with the Reverse Morgage. It has been over a year now and we are still very pleased with our decision. We think Bruce is very professional, knowledgeable and honest. Thank you, Bruce, for all your help.

I first met Bruce Simmons 2017. I found him on the internet. I was looking for someone local. I called him and explained I was only looking into doing a reverse mortgage, so I did not want him to think this was something I was ready to do. Bruce was friendly, very open about the basics of a reverse mortgage. Bruce came to my home and presented the figures and other details that he could offer. The first thing that impressed me was this was not a hard sell, more of a informational meeting. He was very open about all of the details, and answered my questions without hesitation. What really was evident was he was establishing a relationship with me, and I realized he knew I would not take the loan at that time. There was not enough equity in my home, and I would have to bring money to the table. Although I was not ready to do a loan, Bruce assured me he is always available for questions. Four years later, I finally did do a reverse mortgage, and I couldn't be happier with having done it. I have done away with a mortgage payment which allows me to fund my retirement account with that mortgage payment. We did some much needed landscaping with our cash out transaction, and will move on to improvements inside of the house. My reverse mortgage has a line of credit, and I feel sense security knowing it is there if I need it. Bruce explained that a reverse mortgage is not for everyone, but I feel certain that he paved the way for a strategy that worked for me. I will definitely do a refinance when the time is right. I will check in with Bruce to be sure what the benefits are when I do it again.

I have worked with Bruce Simmons for 15 years. Bruce is one of the best in the industry. He is extremely knowledgeable, kinds and detailed in what he does. His clients love working with him and trust him to help them with their Reverse Mortgage loans. I would recommend Bruce to anyone I know that is thinking about or wanting to do a Reverse Mortgage. He will always take very good care of the customers and make sure their needs are met! Class act and one of the best in the industry by far!

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