Since there are no payments, what are my duties on a reverse mortgage? Read here for your responsibilities which come with a reverse mortgage!
A reverse mortgage is a very popular product used by senior citizens. It is popular because it allows a senior citizen to liquidate a portion of their home equity without having to make any monthly mortgage payments. While a reverse mortgage does not require any monthly payments, you still have several duties that come with a reverse mortgage.
Stay In Your Home
Your first duty that comes with a reverse mortgage is that you must stay in your home. A reverse mortgage is designed for individuals who take out a loan that is secured by their primary residence. If you happen to move out of your home and into another home or a nursing facility, then the reverse mortgage must be repaid. This could require you to sell your home or refinance you mortgage.
Pay Property Taxes
Another duty that comes with a reverse mortgage is paying property taxes. Most reverse mortgage loan documents will require you to stay current with your property taxes. If you fall behind on property taxes, your home could be seized by your city. To make paying taxes easier many reverse mortgage lenders will provide their borrowers with a tax escrow that will collect money each month and pay the taxes when they are due.
Pay Homeowner’s Insurance
The third duty that comes with a reverse mortgage is paying for homeowner’s insurance. Homeowner’s insurance is required by a reverse mortgage lender because it protects both you and the lender in the event that your home is damaged, vandalized, or burglarized. If you happen to live in a riskier area that experiences a lot of natural disasters then additional insurance, such as hurricane or flood insurance, may be required.
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