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Do My Heirs Have to Repay the Reverse Mortgage Loan?

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How do my heirs handle the reverse mortgage?

This is a popular question regarding reverse mortgage amongst borrowers and potential borrowers. Many worry about what will happen to their family and would prefer not to be a financial burden to their families after they pass away. However, your heirs have three options on how they are able to satisfy the loan.

1. The heirs can refinance the reverse mortgage loan and pay back the loan based on the terms. With this option, they are able to keep the home. Many adult children who seek to keep their parents home do it for a number of reason, including sentimental value and the importance of keeping the home in the family.

2. The heirs can sell the property to pay off the balance of the loan. They have up to 12 months to work with the bank to sell the property. If there is any remaining money after paying off the balance, the heirs receive the remaining proceeds.

3. Yours heirs can return the house to bank and walk away from it. Because the house is collateral for the reverse mortgage loan, this will satisfy the loan.

These options are available for your heirs to work with and one choice is not better than the others.  Whatever they decide, they should ensure they fully understand the three different ways that they are able to satisfy the loan.

 If you have further questions, call us at 1-888-808-8486 or email us at reversemortgage@weblender.com.

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Image courtesy of [Ambro] / FreeDigitalPhotos.net

About the Author:

I have been working in the reverse mortgage industry for 20-plus years. My goal is to provide consumers the most up-to-date and relevant information about the reverse mortgage industry and how it can affect them.

Thanks for reading!

-Alan F.

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