Reverse Mortgage Guide

Reverse mortgages have plusses and minuses and one of the minuses is that ultimately borrowed money must be paid back.

Generally repaying a reverse mortgage falls into two categories: Loans that must be repaid and loans that are repaid electively.

With a reverse mortgage the usual deal is this: You have no obligation during your lifetime to repay a dime to the lender if you stay in your home. However, there are circumstances when the loan becomes earned, due and payable, including:

*If you move out of the property for 12 months.

*If you sell the property.

*If you pass away then your heirs must decide whether to sell the property or keep the property and refinance to pay off the debt.

In addition to situations where repayment is mandatory, there are also cases where repayment is voluntary.

As a borrower you typically – but not always – have the right to prepay a reverse mortgage at any time without penalty. (At least one major reverse mortgage program will not allow prepayments during the first five years of the loan term.)

For details about specific loan products be certain to review the paperwork with an attorney who specializes in elder law.

This entry was posted on Wednesday, July 18th, 2007 at 2:31 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.