Top Frequently Asked Questions About How Seniors Can Earn Some Extra Money Off Their Mortgage

By March 21, 2017Blog

Reverse Mortgage FAQ

What will happen to my reverse mortgage if I die or move from the home permanently?

Your Reverse Mortgage will have to be repaid when the last surviving borrower on the loan passes away, moves from the home permanently, or does not occupy the home for longer than 12 months. Depending on the type of reverse mortgage you received, you (or your heirs) may be eligible for time extensions rank from six months up to one year. These potential time extensions are only to be used to provide delay to pay off the balance of the reverse mortgage. If the home is sold for more than the balance of the reverse mortgage, the remaining proceeds from the market are yours (or your estate’s) to keep.

It is important to note, that there may also be certain protections available for eligible “non-borrowing spouses” in the event the borrower passes away. There will be several pieces of documentation and information that will need to be provided by the non-borrowing spouse after the borrower has passed away to limit their potential eligibility for these protections.

With a second mortgage, or a home equity line of credit, your loved one must have full income to qualify for the loan, and he or she is required to make monthly payments. A reverse mortgage works differently. The proposed mortgage pays your loved one, and it is available regardless of his or her current income. He or she doesn’t make payments, because the loan isn’t due as long as the house remains your loved one’s principal residence. Like all homeowners, they are still required to pay real state taxes and other conventional payments like utilities, but with an FHA-insured HUD reverse mortgage, your loved one cannot be forced to vacate his or her house because he or she does not make a  mortgage payment.

Yes. Many conservative homeowners choose to continue to make their mortgage payments even though they are not required. You may make all, half, or even a fraction of your payments in an effort to keep the loan balance from increasing.