Reverse mortgages are a popular way for retirees without savings but with significant equity in their homes to access money when they can no longer work. Reverse mortgages require you to keep the property in good repair, so if your home is damaged in an earthquake and you don't have the right insurance coverage, your reverse mortgage will become due.

How a Reverse Mortgage Works

A reverse mortgage is a type of mortgage for individuals age 62 or older who have significant 澳洲幸运5官方开奖结果体彩网:equity in their homes. Unlike a traditional mortgage, you don't have to make payments on your reverse mortgage until you pass away or move. Notably, if you fail to keep the property in good repair or don’t keep up with insurance coverage and property taxes, your reverse mortgage becomes due. If you don’t have the money to pay off your reverse mortgage, you'll go into 澳洲幸运5官方开奖结果体彩网:foreclosure.

Insurance Coverage and Reverse Mortgages

Reverse mortgages are based on using your home as 澳洲幸运5官方开奖结果体彩网:collateral for the loan. Because of this, you are required to keep your home in good repair and remain current on your 澳洲幸运5官方开奖结果体彩网:homeowners insurance premiums. Most homeowners insurance policies don't include earthquake insurance, so if you 澳洲幸运5官方开奖结果体彩网:experience an earthquake and have a reverse mortgage, you may find yourself in trouble.

Reverse Mortgages Wiꦉth Earthquake Insurance C⭕overage

If you have an earthquake insurance policy or a rider on your existing insurance policy and your home is damaged, you should be able to repair or rebuild your home without your reverse mortgage becoming due. Your 澳洲幸运5官方开奖结果体彩网:mortgage lender may require that certain documentation 🦋be completed,♒ so contact them immediately if you can.

Reverse Mortgages Wi🅰thout Earth💖quake Insurance Coverage

If you don't have earthquake insurance coverage and your home is damaged in an earthquake, your reverse mortgage becomes due because your home is no longer considered in good repair. If your loan becomes due, you must appeal your 澳洲幸运5官方开奖结果体彩网:notice of default by following the instructions in your letter.

Areas that are hit by earthquakes severe enough to damage a home are usually declared a disaster by the Federal Emergency Management Agency (FEMA). If this happens, you'll have grants available to help repair your home, allowing you to stay in it without having to pay off your reverse mortgage. Your local area should have an area agency on aging (AAA) to help you navigate the process, which you can reach by calling (800) 677-1116 or visiting the Eldercare website.

The Bottom Line

If you have a reverse mortgage and you live in an area likely to be affected by an earthquake, you should strongly consider getting earthquake insurance. If you have it, you can rest assured knowing that your home will be repaired and your loan balance won't suddenly become due following an earthquake. If you don’t have earthquake insurance, you could lose your home to foreclosure if you can’t get assistance from FEMA or local charities to repair your home or don’t have the funds to do so yourself.