What happens when my reverse mortgage is due?
If no borrower lives in the home for 12 months the reverse mortgage becomes due and must be paid, as is pointed out in this article from a recent edition of Investors Business Daily:
Only after both partners pass away do their heirs
have a 12-month window to sell the house and repay the debt. They also
retain any capital appreciation on the house.
Yet with the housing market going through a slump, will any
appreciation be left at all? Worse, will the loan value exceed the home
value, leaving heirs with additional debt?
Peskin says the latter scenario can never happen.
"Because it's a government-insured loan, it's a totally different
loan than it used to be," he said. "In the event the loan amount ever
exceeded the home value, the government would insure the lender so the
lender cannot lose money, which means they're also insuring the
borrower. So the borrower will never owe more than the house's worth."
Read the entire article here, along with comments on how the Borden's of King's Park, New York used their money to enhance their retirement.
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