Reverse Mortgage Repayment Terms, Part II ................................................................................................................................................................................ The reverse mortgage repayment terms are primarily what define the loan itself. Reverse mortgage lenders offer a very important service to a number of different people over the age of 62 specifically because the repayment terms of the reverse mortgage loan are quite different from the monthly repayment terms of any other home loan they could get. In other words, there are no monthly payments with reverse mortgages; just a repayment required in full when certain events happen. The previous article regarding reverse mortgage repayment terms covered three specific scenarios. There are three more scenarios that could occur as well in order to make the reverse mortgage loan due for a repayment and these three are discussed below.
Scenario D
While the previous article discussed three specific scenarios where the loan borrower (or borrowers, if more than one is in question) left the home for good; either through selling the property, moving out or passing away. However, there are also repayment terms for most reverse mortgage loans that specifically cover events where there is a prolonged absence from the home as well. The number that you will hear most reverse mortgage lenders use is 12 months in a row. In other words, if the loan borrower is unable to live in their house because of illness or a related reason and are forced to vacate for longer than a one year period, the reverse mortgage repayment will be due.
Scenario E
Financial maintenance of a property is important, especially when it comes to the reverse mortgage loan. This is because the payment for a reverse mortgage comes from the property itself and therefore financial maintenance of a property through the prompt payment of property taxes, house insurance premiums and any other home related fees is very important to the reverse mortgage lenders. If you have problems and ultimately fail to pay either your property taxes or your home insurance premiums, then the loan for the reverse mortgage will be due for repayment. If you pay either of them late, depending on the terms of your agreement, the loan might still be called in.
Scenario F
The final scenario that is taken into account when it comes to reverse mortgage repayment has to do with another type of home maintenance. Instead of financial maintenance however, the reverse mortgage lenders look at physical maintenance of the structures on the property. While reasonable wear and tear is expected on any piece of property, if the reverse mortgage lender deems that there has been wear and tear that is more than reasonable and that the homeowner has not taken sufficient steps to correct the problems, then they might choose to call the loan in for a repayment. This is the most subjective of the six repayment terms and really depends a lot on what is written in the contract. Therefore, it is important that you look at this condition when you read any contract pertaining to a reverse mortgage loan; doing so might end up saving you a lot of stress later on down the road.
