What is a Non Recourse Loan?

What is a Non Recourse Loan?

A Non-Recourse loan provides the ultimate in protection for the Reverse Mortgage borrowers and their estate. Whether a borrower receives a Government Insured Reverse Mortgage or a Proprietary Reverse Mortgage, both products provide protection for the borrower against changes in the future value of the home.

This means that you can live in your home for life, never make another mortgage payment, and never have to worry about passing an obligation on to an heir. In most scenarios, you still pass equity on to your heirs but it's nice to know that regardless of how much money you receive on your reverse mortgage, how long you live in your property, what the interest rates do, or what home values do in the future, you or your heirs can never owe more money than the property is worth. This non-recourse feature is one of the greatest of several built in security benefits the reverse mortgage is known for.

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.

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