What are My Responsibilities as a Borrower? ................................................................................................................................................................................ Just as a lender has certain responsibilities to you as a borrower, you yourself have certain responsibilities if you decide on a reverse mortgage. First of all you need to make certain that you meet the eligibility requirements. This means that you must be at least 62 years of age and own your own home.
When you take out your reverse mortgage loan, there will be certain costs associated with the loan that you are responsible for paying. Luckily, most of these costs can be financed into your loan. This means that while you are responsible for paying these expenses, you may not have to do so during your lifetime.
In addition, you must have and retain the title to your home. In other words, you cannot sign your home over to a relative while you have a reverse mortgage. You are also required to make certain that all taxes on your property are paid on time and in full. You may choose to set up an escrow account in order to make certain that this is taken care of. Likewise, you must ensure that your home has up to date homeowners insurance, and that can also be paid through an escrow account if you so choose.
You are also required to keep your home in good condition. This means that you must stay up to date with normal maintenance, and in the event of any damage or degradation to your property, you are required to correct the problem as soon as is reasonably possible. Failure to do so may result in your lender calling your loan, which meant that they can require you to pay it off immediately. In most cases, this would force you to sell your home, which is usually not the desired outcome.
In order to retain your reverse mortgage, you need to keep you home as your primary residence. This means that you cannot move to another primary residence. Even in the event that you become ill, you cannot be out of your home for more than 12 consecutive months without losing your primary residence status.
As long as you keep up all of your responsibilities as the borrower of your reverse mortgage, you can live in your home payment-free for the rest of your life. Under normal circumstances, the loan will not become due until you either decide to voluntarily and permanently leave your residence, or you reach the end of your lifespan. At this point, the real benefit of the reverse mortgage is that it is paid in full from the sale of the home, leaving any of your surviving relatives or beneficiaries with no debt. If the house sells for more than the loan amount, you may even be leaving them with something extra.
