Who pays the taxes and insurance on a reverse mortgage? What happens if I can’t afford the taxes on my home? Will a tax lien void a reverse mortgage?
When you take out a reverse mortgage on your home you, as the homeowner, are fully responsible for the taxes and insurance on the property. If your original mortgage does not include your taxes in the payment, and you make payments to the government, you will still be required to do so with a reverse mortgage. Homeowners insurance is required to obtain and keep a reverse mortgage. The loan contract will state that proper insurance must be kept on the property at all times during the course of the loan.
What happens if I can’t afford the taxes on my home?
When you have a reverse mortgage on your home you are required to keep your taxes current. If, for some reason, you fall behind on your taxes you will need to make arrangements with the taxing authority quickly. Many taxes can be divided into monthly payments or quarterly payments if this will enable the taxpayer to keep current in their taxes. Failure to keep your taxes current can result in the reverse mortgage being recalled.
Will a tax lien void a reverse mortgage?
Falling behind on your taxes during a reverse mortgage contract will cause you to forfeit the reverse mortgage. A tax lien against your property, once it has a reverse mortgage on it, will need to be resolved immediately or the contract will be considered void. Lending institutions require that the home title stay free and clear of any liens or other attachments during the course of the loan. These lenders need to be able to sell the home free and clear after the reverse mortgage is complete to recoup their investments.
Related posts:
- Am I Responsible For Maintenance & Taxes If I Have A Reverse Mortgage?
- Are There Homeowner’s Insurance Requirements On A Reverse Mortgage?
- How Do Reverse Mortgages Affect Property Taxes?
- What Type Of Insurance Do I Need For A Reverse Mortgage?
- Do I Do The Maintenance & Pay Taxes If I Have A Reverse Mortgage?