Reverse Mortgage loans have been a favorite option for the senior homeowners to secure funds without loosing out the ownership. However, the amount of balance received out of the reverse mortgage loan needs to be repaid back to the lender.
There are two conditions that determine the decision to repay the amount back to the reverse mortgage lender. One of the conditions is the death of the senior borrower before the loan is paid off. The heir has the following options to choose for repaying back the outstanding loan:
1. Use their personal funds to repay and plans to retain the house
2. Sell the home and repay the outstanding loan balance with funds from sale of the house
3. To repay the loan from the remaining balance available from the estate
4. Take another regular mortgage against the home to repay the existing reverse mortgage loan
You, as a borrower, must keep one thing in mind: the rightful heir can transfer the ownership of the home only when he successfully pays back the amount to the lender. Another condition of repaying back is that the borrower decides to move to another home or certain illness restricts them from staying there.
You should discuss such conditions and consequences in detail with the lender. Therefore, it is necessary to consult with a reliable lender who has experience in this industry and can provide you good suggestions to create a win-win situation for everyone involved. After all, you want a loan that can give you cash-in-hand without losing out the ownership of the home.
