- A reverse mortgage loan does not become due and payable until the last surviving borrower dies, sells the home, or permanently leaves the primary residence.
- The homeowner must continue to pay the property taxes and homeowner insurance, as well as maintain proper upkeep of the property. (Taxes and insurance can be paid out of the loan proceeds if so desired.)
- At the time the loan becomes due and payable, your heirs can choose to either repay the loan (through refinancing, life insurance, etc.) and keep the house, or sell the house to repay the loan.
You and your heirs will receive all remaining equity if any exists after the sale. Since the reverse mortgage is a non-recourse loan, you or your heirs will never owe more than the amount for which the home is sold, even if there is not sufficient equity to pay off the loan.
You will be required to attend a counseling session approved by HUD (Department of Housing and Urban Development) prior to applying for your reverse mortgage.