With a reverse mortgage, 90% of which are federally insured, you do not make any payments. Instead, you receive either a lump sum or monthly payments based on the equity in your home. You never have to pay it back, as long as your home is your principal residence. Lenders recover their principal and interest when the home is sold. Any remaining value goes to the homeowner or his or her survivors. With the federally-insured option, you can never owe more than your home's value.
No! There is nothing to repay as long as one of the borrowers continues to live in the house (of course, you must pay your taxes and insurance, just like any homeowner). With the most popular HECM reverse mortgage, you can never owe more than your home's value.
You or your estate will repay the lender the principal, interest, and any applicable fees when the home is no longer your primary residence. Any remaining equity belongs to you or to your heirs. None of your other assets are affected by your reverse mortgage. No debt will be passed along to your estate or heirs.
What happens when my house gets passed to my heirs?
The reverse mortgage becomes due when it's passed to you heirs. They can either pay the balance due and keep the home, or sell it and use the proceeds to pay off the loan. Any proceeds leftover belong to your heirs.
Mortgage Associates, Inc. is an FHA-approved Mortgage Broker (78225-0000-4) and is licensed in Maryland, Virginia (#MB-1038), Pennsylvania and Delaware. Mortgage Associates, Inc. is not affiliated with, or an agent or division of, a governmental agency or a depository institution.
Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, and home value. As a broker, we can arrange a loan with a third-party lender, but we cannot make, fund, or approve mortgage loans or guarantee rates. Not all programs are available in all areas.
