As a general rule, a reverse mortgage will become due when a person dies or no longer resides at the home full time. Failure to keep contractual rules will also cause the contract to break and the loan will need to be paid immediately. These contractual rules include failure to keep taxes current and failure to maintain the property. Individual contracts may contain other rules, but these are the most common causes for breach of contract.
Will My Reverse Mortgage Need To Be Paid In Full When The Funds Run Out?
Most reverse mortgages are calculated to encompass as many contingencies as possible so that the borrower does not run out of money during their life time. If the issue does occur, the borrower will not have to pay back the reverse mortgage loan immediately. If all aspects of the contract remain intact, the contract is binding and the lender cannot collect until you wither pass away or no longer live in that home.
Will I Have To Make Monthly or Yearly Payments On My Reverse Mortgage?
A reverse mortgage does not require you to make any payments on the loan. If you have an insured reverse mortgage you may be required to make a yearly premium payment. This will, usually, come directly out of your monthly draw. As such, when looking for a mortgage company, always look for a trusted one like Aurora mortgage company. Payments can be made toward the loan at any time if the borrower wishes, however, they are not required. A reverse mortgage uses your home as collateral for the loan. Once you are no longer in possession of the home they will sell the home to pay off the money owed. If there is any money left over from the sale of your home your estate will be given the money. If the sale does not cover the price of the loan, and your loan is not insured, your estate may be held accountable for the remaining balance.