Reverse Mortgages

Terms of repaying your HECM reverse mortgage. When you have made the decision to take out a HECM reverse mortgage through the FHA it is important to know the facts about repayment of your loan. The FHA requires you to have mortgage counseling before you take a HECM loan, but it is not always easy to remember all of the repayment facts. That is why The Department of Housing and Urban Development lists repayment facts right on their website for your convenience here.

Some of the repayment information regarding your HECM reverse mortgage that you will find on HUD's website includes:

If you sell the home the HECM mortgage will automatically be paid in full out of the proceeds from the sale of the home.
When the last surviving borrower of the HECM mortgage dies the home must be put for sale and the loan will be paid in full from the sale of the home. This is important to understand because if you put the reverse mortgage in only one spouses name and they die first than the surviving spouse will be forced to sell the home and pay back the loan, so be sure to be joint borrowers with your spouse when you take a HECM loan.
If you do not keep up the property you may have to pay back the HECM loan. By not making necessary repairs or improvements to your property the value decreases and the lender may require early repayment.
If you move. Part of the mortgage agreement is that you are the primary resident of the home. Exceptions are made if you have a temporary healthcare need that puts you away from your home for a period of time as long as it is not longer than 12 months straight.
If you do not keep homeowners insurance on the home or do not pay your necessary property taxes thee lender may also ask for repayment of your HECM reverse mortgage loan. For more information regarding HUD's policies about HECM reverse mortgage loans go to The HUD.