Reverse mortgages are like physician mortgage loans that can be revoked during the lending period, but only if the borrower fails to keep their contractual duties. These duties include: Proper maintenance on the home and property, failure to keep house properly insured, failure to pay taxes or living in the home as a main residence. If the home owner complies with these regulations there should be no worries about the reverse mortgage lender defaulting on the mortgage.
Can the lenders take my home when I have a reverse mortgage?
The only way that a reverse mortgage lender can take your home is if you break the contract. Failure to keep the home properly maintained is a breach of contract. This would include failing to do necessary repairs to keep the house safe and livable. If you let your homeowners policy lapse you could loose your home. Reverse mortgage lenders require the home be fully insured at all times. Falling behind in your taxes, any form of tax, can cause you to void your contract. Tax liens are the only type of lien that can be paid prior to a mortgage. Leaving permanent residence of the home is also a breach in contract. This includes extended stays in a nursing home that exceed a year.
Can I move and still keep my reverse mortgage payments?
When you move you can no longer receive payments from your reverse mortgage. Once your home is no longer considered your main residence the reverse mortgage lender will require you to sell the home to cover the debt. You will be required to pay all the money you borrowed, plus interest and fees, within a certain period of time or relinquish control of the hoe to the lender.
