A Reverse Mortgage becomes due and payable when the last remaining borrower sells the property, permanently leaves the home or passes away. When one of these events occur, the borrower or his or her estate is responsible for paying back all of the money borrowed up to the value of the property. This includes all closing costs that were financed in the loan, the loan balance and the accumulated interest.
The borrower or the estate may choose to either refinance the loan or to sell the property in order to pay back the money that is due. Any remaining assets after the loan has been paid in full will go to the borrower or the estate.
In the event that the loan balance is greater than what the house is worth, the federal government guarantees that the borrower or estate is only responsible for paying back the amount up to the value of the home. This means that the government will pay for any remaining mortgage balance that may be beyond the appraised value of the home. The borrower or estate will never owe more than the value of the home.
Do you need answers to your Reverse Mortgage questions? Talk one-on-one with a Reverse Mortgage Expert. Send an email to kmcvearry@academyloans.com or call toll-free 1-866-738-6125. We're here to listen, answer questions and help you make the right decisions.
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