In your Reverse Mortgage, which is an advance-of-equity, remember the 4 “Nevers.”
- You NEVER make a monthly payment.
- You NEVER come off the title; It is still your home.
- You NEVER owe more than what the home is worth.
- You NEVER pass the debt to your heirs.
Provide a voided check (for your chosen account) to the closer of your Reverse Mortgage so your funds can be wire-transferred by direct deposit to your account. This deposit will take effect immediately following your closing/funding under the direction of your Lender and Title Company.
You retain full ownership of the property. Your Reverse Mortgage is simply an advance-of-equity refinance loan on your property.
Immediately following your closing/funding, your Reverse Mortgage funds will be used to pay off your existing mortgage (if any). Your Title Company will have the pertinent invoices pertaining to required payments due which could include the fees for the mortgage payoff, HUD Counseling, Survey, Structural Engineer, or other professional service invoices required for completion of your specific Reverse Mortgage process.
You are responsible for the payment of your property taxes and insurance on your home. Prior to closing/funding of your Reverse Mortgage both of these responsibilities will have to be reviewed and calculated for required coverage and/or payment depending on due dates and other factors. Your Title Company will work with Senior Reverse Mortgage Services, Inc. to determine any possible expenses to be paid in your closing/funding.
Your Servicing Department will be assigned to you. An announcement and information kit will be sent to you from your Servicing Department following your closing/funding.
You will be sent information about your monthly statement in the guide and information kit you will receive concerning the Servicing Department.
Under the HUD/FHA requirements of a Reverse Mortgage, one of the requirements is that you will live in your home as your primary residence. You can take trips or leave the home for up to 12 consecutive months without defaulting on your Reverse Mortgage. Your Servicing Department will send you a letter or card annually to verify your home occupancy. You will need to sign your name on the document and return it within 30 days to the Servicing Department.
Repairs for a home are common and accessible Reverse Mortgage funds can help with those expenses. Your Appraisal would reveal any specifically required repairs. The Lender will “condition” for the completion for these specific repairs. It is important to get the repairs started as quickly as possible. If these repairs are not completed before the closing/funding, you will receive a letter from your Servicing Department. The letter will provide you with an instruction guide. There will be a completion deadline established by the Servicing Department.
Your Reverse Mortgage will have to be repaid when the last surviving borrower on the loan passes away, sells the property, moves away from the home permanently, or does not occupy the home for longer than 12 consecutive months. You will be responsible for obtaining information from the Servicing Department concerning placing the property for sale, options for heirs to obtain a new loan to pay off the balance of the Reverse Mortgage and other important data. When the home is sold for more than the required balance on the Reverse Mortgage, the remaining sale proceeds are yours or (your estate’s) to keep.