A reverse mortgage loan becomes due and must be paid in full when one or more of the following conditions occurs:
(1) The last surviving borrower passes away or sells the home.
(2) All borrowers permanently move out of the home.
(3) The last surviving borrower fails to live in the home for 12 consecutive months due to physical or mental illness.
(4) You fail to pay property taxes or insurance.
(5) You let the property deteriorate, beyond what is considered reasonable wear and tear, and do not correct the problems.
There are a lot of misconceptions regarding paying off a reverse mortgage upon the sale of a property, whether by the original owners who took out the reverse mortgage or by their next of kin. The amount which you sell the property for above and beyond that which is owed to the reverse mortgage lender is your capital gain.
This is contrary to the misconception that no matter how much the home is sold for, the reverse mortgage lender will step in and take all the proceeds, or take ownership of the home after the loan becomes due in full. Its your home, and your profit if the home is worth more than the loan.
Contact a mortgage professional, Michael R. Byrne, at 1-800-999-2489 x7972 or mbyrne@gfhomeloans.com and your current mortgage servicer if you feel your loan may become due in full.
