What Financial Responsibilities Am I Liable For With A Reverse Mortgage?

What financial responsibilities am I liable for with a reverse mortgage?  Read here to understand what responsibilities you still have under a reverse mortgage!

While a reverse mortgage is a popular financial tool for many senior citizens, it is concerning that some borrowers may not recognize all of their financial responsibilities.  When you take out a reverse mortgage, there are several financial responsibilities for which you are still liable.

Origination Fees

The first set of financial responsibilities that you are liable for with a reverse mortgage are your origination fees.  Origination fees for a reverse mortgage are quite high and are often a leading deterrent that keep people from getting a reverse mortgage.  While the banks origination fees are capped at $6,000, you will also have to pay for an appraisal, a home inspection, and for legal fees.  All of these fees can cost an additional few thousand dollars.

Accumulating Interest

The second set of financial responsibilities that you are liable for with a reverse mortgage is accumulating interest.  Since reverse mortgages do not require any monthly payments, the interest on the outstanding balance grows exponentially.  By the time the loan needs to be repaid, you may end up paying more than double the amount that was borrowed.  The accumulated interest will need to be repaid either when your home is sold, you move out, or upon your death.

Property Taxes and Maintenance

The third set of financial responsibilities that you are liable for with a reverse mortgage are property taxes and maintenance.  When you take out a reverse mortgage, you still own the home and therefore need to pay all taxes and keep it in good condition.  If you fall behind on real estate taxes or any require maintenance dues, you could become in default of your reverse mortgage.

Related posts:

1. What Are My Responsibilities If I Get A Reverse Mortgage?
2. Can Children Be Liable For A Reverse Mortgage Of Deceased Parents?
3. What Responsibilities Do I Have If I Take Out A Reverse Mortgage?
4. What are my responsibilities if I take our a Reverse Mortgage?
5. Is a Reverse Mortgage the Right Financial Move?

This entry was posted on Tuesday, April 6th, 2010 at 11:32 am and is filed under reverse mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.