Reverse mortgages allow an older person to tap the accumulated 澳洲幸运5官方开奖结果体彩网:equity in their home without having to sell it. Eventually,🌊 however, the money will have to be paid back—a responsibility that often falls to the borrower’s heirs. Rules for spouses depend on the spouse's eligibility, while other heirs usually have the ability to sell the home, pay off th🉐e mortgage, or return the property to the lender.

Reverse Mortgage Basics

The most common type of reverse mortgage is a 澳洲幸运5官方开奖♔结果体彩网:home equity conversion mortgage (HE🌜CM). These loans are insured by the 澳洲幸运5官方开奖结果体彩网:Federal🍌 Housin﷽g Administration (FHA) and issued by FHA-approved lenders. They are available only to borrowers ages 62 and older.

When the borrower (or last co-borrower) dies, moves out for 12 consecutive months or more (such as into a nursing facility), or sells the home, the loan must be paid off within a certain time frame. The specific rules and timing depend on whether the heir to the home is a spouse or someone else.

If You Are the Borrower’s Spouse

Here is a brief look at the three basic categories into which spouses fall. Please note that the following rules apply to HECMs originated on or after Aug. 4, 2014. The rules are different for older HECMs in some respects. You can find both sets of rules on the 澳洲幸运5官方开奖结果体彩网:Consumer Financial Protection Buඣreau website.

1. Co-Borrowing Spouses

A co-borrowing spouse must be listed as such on the loan documents. To qualify as a co-borrower in the first place, they must have been 62 or older when the loan was issued. Younger spouses can’t be co-borrowers. Co-borrowing spouses can continue to live in the home 澳洲幸运5官方开奖结果体彩网:after their spouse dies and receive payments from the lender. When the co-bor𓂃rowing spouse dies or moves out, the home will go to their heirs, who will then have to pay off the loan as described below.

2. Eligible Non-Borrowing Spouses

Spouses who hadn’t reached age 62 when their spouse signed up for a reverse mortgage can be listed in the loan documents as eligible non-borrowing spouses. If they meet all the qualifications, they will be entitled to remain in the home after their spouse dies. Those qualifications include having lived in the home when the loan closed and continuing to make it their 澳洲幸运5官方开奖结果体彩网:principal residence. Unlike a co-borrower, however, they won’t receive further payments from the loan. The loan will come due when the eligible non-borrowing spouse no longer lives in the home.

3. Ineligible Non-Borrowing Spouses

An ineligible non-borrowing spouse isn’t a co-borrower and doesn’t meet the requirements of eligible non-borrowing spouses. A spouse in this situat𒁏ion can remain in the ho🐼me only if they pay off the reverse mortgage.

If You’re Not the Borrower’s Spouse

If you’re not the borrower’s spouse but are listed in the mortgage documents as a co-borrower, then you have the same rights as a co-borrowing spouse. Otherwise, people who are not spouses who inherit a home with a reverse mortgage have three basic options: 

• Sell the home and use the proceeds to pay off the mortgage: If any equity is left over, it’s yours to keep. 
• Pay off the mortgage with your own money and keep the home: This may mean taking out a new, traditional mortgage.
• Turn the home over to the lender to satisfy the mortgage: This is known as a 澳洲幸运5官方开奖结果体彩网:deed in lieu of foreclosure.

The rules say that you must pay off the loan within 30 days of receiving a Due and Payable Notice from the mortgage lender. However, you can request an extension of up to a year to sell the home or obtain financing to buy it yourself.

The rules on HECMs protect heirs from owing more money on the mortgage than the home is worth. The most that you’re obligated to pay is either the loan balance or 95% of the home’s appraised value, whichever is less. FHA insurance will make up the difference to the lender.

Where to Go for Help

The laws on reverse mortgages can be complicated, especially for heirs who are not spouses and eligible and ineligible non-borrowing spouses. The reverse mortgage 澳洲幸运5官方开奖结果体彩网:lender or loan ꦚservicer should be abꦡle to explain your options, or you may want to hire a lawyer.

You can also consult a United States 澳洲幸运5官方开奖结果体彩网:Department of Housing and U🍃rban Developmen൩t (HUD)-approved housing counselor for free or low-cost advice. HUD is the parent department of the FHA and has a search tool for finding an approved counseling agency on its website. The phone number is (800) 569-4287.

The Bottom Line

Reverse mortgages have to be paid off after the last borrower dies or moves out. Heirs have several options at that point, depending on whether they are eligible or ineligible non-borrowing spouses or other heirs. If you expect to inherit a home with a reverse mortgage, you might want to consider your options (such as selling the home or buying it yourself) beforehand. 澳洲幸运5官🐬方开奖结果体彩网:If you’re a borrower with a reverse mortgag🌌e, you’ll do your heirs a favor by discuss♈ing the options with them.