A reverse mortgage is a wonderful tool to help seniors access the equity in their home. However, to be eligible to close on a reverse mortgage, you must first satisfy requirements that include being at least 62 years old, owning your home, and residing there as your primary residence.
Responsibilities, however, do not end after the close of a reverse mortgage. You remain the owner of the home and thus retain responsibility of obligations to fulfill. The following are just some of the obligations you must satisfy after you close on your reverse mortgage.
The property must be well-kept, and good conditions must be maintained. This is important because the house is the collateral that will be used to pay back the loan after you leave the home; therefore it must be maintained in order to retain its value.
All property taxes must continue to be paid on the property even after the reverse mortgage loan has closed. You may use part of your disbursed funds for this purpose, or you may set-aside a certain amount to ensure this obligation is satisfied.
You must pay all homeowner insurance to cover any possible hazards like fire, natural disasters, theft, and vandalism. This is important in order to protect the home.
Homeowners Association fees or any fees related to the property must also be paid. These dues are meant to help in the maintenance of the property and keep it in optimal condition.
These are just some of the obligations and responsibilities you must maintain in order not to default on your reverse mortgage loan and thus avoid the loan becoming due. If you as a borrower would like to request help setting aside the funds for these obligations, your lender can withhold funds to cover these necessary responsibilities.
For more information about what your responsibilities as a reverse mortgage borrower would be, call your very own Reverse Mortgage Professional at 1-800-AAG-0103, who will detail all responsibilities for your unique situation.
“HECM Protocol.” Portal.hud.gov. Chapter 5, Section E. HUD. n.d. Web. 4 August 2014. http://portal.hud.gov/hudportal/documents/huddoc?id=7610-0_5_secE.pdf
Paterson, Beth. “Reverse Mortgage Borrowers’ Responsibilities…or Consequences.” Rmsidac.com. 27 June 2010. Web. 4 August 2014. http://rmsidac.com/reverse-mortgage-borrowers-responsibilities-or-consequences/
“Reverse Mortgages.” Nidonline.org. NID Housing Counseling Agency. n.d. Web. 4 August 2014. http://www.nidonline.org/education/reverse_mortgages.html#step7