If I die what happens to my reverse mortgage? Will my family pay for my reverse mortgage? What happens to my reverse mortgage if I outlive my money?
When you have a reverse mortgage you are taking money from your equity to use for living expenses. At the time of your death the mortgage company will sell your home to cover the money you owe the mortgage holder. Your family will, at that time, have the ability to repay the reverse mortgage in full if they wish to keep the home.
Will my family pay for my reverse mortgage?
Your family will not have to pay for any monies toward the reverse mortgage unless the sale of the home does not cover the amount that is due. Some, not all, reverse mortgages hold this clause that makes any balance due payable by the heirs. When you apply for a reverse mortgage you should be very aware if this clause is in your contract. For this reason it is always encouraged that you look for a FHA backed reverse mortgage. If you apply for a mortgage through a FHA/HUD authorized broker you can purchase mortgage insurance. This insurance will guarantee that your heirs will not be responsible for any outstanding debt your reverse mortgage may hold.
What happens to my reverse mortgage if I outlive my money?
When you receive a reverse mortgage the amount of money available to you is based on the available equity in your home. If you should outlive the available amount you will be able to still retain your home. At the event of your death the reverse mortgage company will then sell your home to regain their money. Also, during this period you may request a reevaluation of the value of your home. This may allow you to secure more money to live off of during your life time.
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