What is repaid when my reverse mortgage becomes due? Find out here what you will need to pay when paying off your reverse mortgage.
A common question that many reverse mortgage borrowers has is what they will need to pay for when paying off their reverse mortgage. There are various items that will need to be paid for at closing when either the home is sold or the loan is paid off.
Principal Balance Borrowed
The first item that will need to be repaid when your reverse mortgage becomes due is the principal balance borrowed. The principal balance borrowed is equal to the lump sum payment that you receive initially, the combined monthly payments you’ve received, or the amount of money you’ve borrowed from your reverse mortgage line of credit. This number should be easily tracked through loan statements received from your reverse mortgage lender.
Accrued Interest
The next item that will need to be repaid when your reverse mortgage becomes due is the accrued interest. The accrued interest is the amount of interest that has been charged based off of the amount of principal that you have borrowed. Depending on the form of payment you received and how long it has been since you borrowed the money, this could equal more than the principal that you borrowed. The accrued interest due to the lender should not come as surprise as they are required to keep you informed through monthly loan statements.
Real Estate Taxes
The third item that will need to be repaid when your reverse mortgage becomes due is any real estate taxes that are due. If you pay off your home through proceeds of a sale, then you will be required to pay any due real estate taxes. Depending on your situation, you will either need to pay these back taxes to the taxing authority or the purchaser of your home.
Related posts: