You may sell your home at any time

The loan is repaid when you die, sell your home, or when your home is no longer your primary residence. You could sell your home at any time without paying a prepayment penalty. With reverse mortgages you could never owe more than the home is worth, in other words “be in the red”. The best way to explain it would be that it is very similar to a forward or conventional loan. The only difference is that the payments each month come out of the equity of your home. So once you sell the home you will have to pay the bank back whatever interest has been added to the balance plus any cashout that you have taken or had taken when you completed the reverse mortgage. If for some reason the home is worth less than what you owe with interest and how much money you have taken out. The bank will eat that cost. That is why you pay for FHA insurance in your closing costs.

This entry was posted in Reverse Mortgage Benefits. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *