When is the loan paid off?

When is the reverse mortgage loan required to be paid off?

The reverse mortgage loan ends when the last surviving borrower dies, sells the home, or permanently moves away. "Permanently" generally means you have not lived in your home for 12 consequitive months. At that point, the loan will need to be repaid. The reverse mortgage can be paid off with the proceeds of the sale of the house, or be refinanced by the heirs of the homeowner's estate. If the proceeds exceed the loan payoff, the owner of the house receives the (profit) difference or if the owner has died, the heirs receive the difference. In cases where the proceeds are not sufficient to pay off the loan, in other words the house sells for less than the loan payoff, then the bank (or mortgage insurance which the bank has on the loan) absorbs the difference. You can never owe more than the value of the home at the time the loan is repaid. The homeowner will NEVER pay the Reverse Lender a greater amount of money than what the house sold for.

The technical term for this type of loan is a "Non Recourse Loan." It means that the lender does not have legal recourse to anything other than the value of the home when the loan is to be paid off. Not your income, your other assets, or your heirs. So even if you receive monthly loan advances until you are aged 115, and your home declines in value between now and then, and the total of monthly advances becomes greater than your home's value - you will still never owe more than the value of your home. If you or your heirs sell your home in order to pay off the loan, the debt is guaranteed to be limited to the net proceeds from the sale of your home.

Senior Finance Network - 10121 W Sample Rd. - Coral Springs, FL 33065
Toll Free: (800) 827-2599 Office: (954) 755-4663
Fax: (954) 755-8550 Email: Info@SeniorFinanceNetwork.com

:: What is a Reverse Mortgage? :: Why Get a Reverse Mortgage? :: How Much Money Can I Get? :: How Do I Receive My Money? :: Process - HOW do I proceed? :: When is the loan paid off? :: Costs/Fees of a RM :: The Truths About Reverse Mortages :: What is a Non Recourse Loan? :: Industry Consumer Safeguards :: For the Families and Advisors of Seniors :: Frequently Asked Questions :: Request Information :: Glossary of Terms :: Hipotecas Revertidas :: 10 Datos Importantes :: About Us :: Contact Us :: Purchase a Home :: Schedule of Events :: Employment Info :: Free Informative Guides :: Press Releases ::

FAMB - Florida Association of Mortgage Brokers