A reverse mortgage becomes payable upon the death of the mortgage holder or when that person is no longer in residence at that home. Leaving the residence qualifies as moving to another home, moving into a rehabilitation facility for over 9 months or moving into a nursing home. If the home is no longer your residence you can no longer receive payments from the reverse mortgage. There are a few exceptions to the rule. If both spouses are listed on the reverse mortgage the remaining spouse can retain the home until they either move or die. If one spouse dies or needs extended care the remaining spouse will not loose their residence or be forced to move.
Are There Any Other Ways That A Reverse Mortgage Becomes Payable Before I Die?
If you have a reverse mortgage you must, per your contract, remain current on all of your taxes. This includes personal, property or business taxes. In the event that you become delinquent on your taxes the reverse mortgage company has the right to cancel the contract and demand payment. In most cases they will work with you to get the taxes paid before breaking the contract. Tax liens are the only form of lien that can supersede a reverse mortgage note. The mortgage company will not risk loosing the property to the government after they have been making payments to the owner.
Are There Any Other Conditions That A Reverse Mortgage Can Become Due?
The only other condition that may cause breach of contract is failure on the part of the home owner to maintain the property. If you allow the home or the property to fall into disrepair the reverse mortgage holder can demand full payment and cancel the contract. The home, inside and out, must be kept in “selling” condition at all times. The mortgage company does not want a home that it cannot resell upon acquisition.
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