Typically, reverse mortgage loans must be paid off, either when you move or when you die. However, the loan may have to be paid off sooner if the home is no longer your primary residence, you stop paying property taxes or insurance, or you don’t keep it in good condition.
Upon the death of the borrower and eligible non-borrowing spouse, the loan is due and must be repaid. The heirs will have 30 days after receiving a “due and payable notice” or notice of maturity and payment obligation from the lender, to buy, sell, or deliver the home to the lender to pay off the debt.
However, this period may possibly be extended for up to one year, so that the heirs can sell the home, or obtain financing to buy it. Your heirs can consult a HUD-approved housing counseling agency or attorney to find out more information.
If the borrower is out of the home for more than 12 consecutive months, in a health care facility, such as a hospital, nursing home, or assisted living facility, and there is no co-borrower living in the home, whoever is in the home you will have to move, unless you can repay the loan, or qualify as an eligible non-borrowing spouse.
The term “Eligible Non-Borrowing Spouse” or Eligible Non-Borrowing Spouse, is used when a person is not a co-borrower in the mortgage, but meets the requirements required by the regulations of the Department of Housing and Urban Development (HUD, for its acronym in English). ), to stay in the home after you die.
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