A Quick Guide to Your Loan Obligations
Your top 3 responsibilities as a reverse mortgage borrower
Loan Requirements Guide for Reverse Mortgage Borrowers
For homeowners age 62 or older, a reverse mortgage can come in handy as a strategic source of retirement funds. It allows you to leverage the equity you’ve built up in your home to pay for home renovations, cover healthcare expenses, travel or to supplement your retirement savings without necessarily having to tap into interest-paying investments potentially. Best of all, you choose how to receive your money, either as a lump sum, monthly payments, a line of credit that’s there when you need it, or a combination of these.*
Federal regulations give you specific rights as a reverse mortgage borrower. For example, you have the right of rescission, should you decide to cancel your reverse mortgage loan within three days of closing. And when it comes to paying back your loan down the road, neither you nor your heirs will have to pay more than the amount borrowed or the current value of the home because a reverse mortgage is a non-recourse loan.
As a non-recourse mortgage loan borrower, you also have certain mortgage loan responsibilities to keep your loan in good standing, which includes:
- The home must remain your principal residence.
Under the terms of your reverse mortgage loan, you retain the title of your home, and you must continue to live in it. Each year, you must certify in writing that you occupy the home as such.
This doesn’t mean you can’t have a vacation home. In fact, you can even use the proceeds of your non-recourse mortgage loan to purchase one. You just have to limit the time you live there.
- Taxes, insurance and related fees are your responsibility.
As with any loan, reverse mortgage borrowers must keep current with property taxes, insurance as well any flood insurance premiums, condominium fees or special assessments indicated at closing. You can make direct payments on your own, or you can have the lender take care of these expenses on your behalf, using your loan proceeds in a separate account.
- You must maintain upkeep and repair.
During the application process, your lender makes sure your home meets HUD‘s property requirements.
Lenders and servicers will give you notice before popping over for an inspection. They may also instruct you to make any necessary repairs and how long you have to make them. Failure to do so could lead to default of your loan.
You may not need a non-recourse reverse mortgage home loan today, but what about tomorrow?
A reverse mortgage loan is an exclusive financial tool designed for homeowners age 62 and older who want to access their home equity. Contact Reverse Mortgage Funding (RMF) at (888) 277-1567 to learn if you make a good reverse mortgage candidate. We’ll schedule an in-person appointment with a local loan specialist at your convenience.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.8-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
* Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.
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If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.
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