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What happens with a reverse mortgage at death?

my family member is considering getting a reverse mortgage and i worry what will happen when if they pass away and they haven't paid it off. i dont want the burden to be left on their family by carlos_ray2892980 from Newton Falls, New York. Apr 17th 2015 Reply


Ted Ark (tark@goldmortgage.com)
#31 ranked lender in New Jersey - 32 contributions

When the family member passes, the 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. The borrower or heirs may be eligible for time extensions ranging from six months to one year. These potential time extensions are only to be used to provide time to satisfy the balance of the reverse mortgage. The family can sell the home and payoff the outstanding loan amount. Hopefully at a profit. If an appraisal indicates the property is underwater, the family is required to payoff 98% of the appraisal value.

Apr 17th 2015
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Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

The note will become due. You will either have to refinances/seller the property to pay off that reverse note or the home becomes property of the bank.

Apr 17th 2015
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#136 ranked lender in Florida - 637 contributions

After last survivor on the loan passes then the reverse mortgage has to be satisfied by either selling, refinancing to a different loan product, reverse mortgages are rarely underwater, but if so the Ted's comment of heirs must pay off up to 98% of appraised value seems like the correct answer, I have also heard you just walk away. I would check with the lender on that last option..

Apr 18th 2015
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