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Important Reminders about Reverse Mortgages

Along with requirements, certain rules and obligations are also part of getting a reverse mortgage. Most of these are similar to other financial transactions such as getting a credit card or opening a bank account. However, some are also unique to this specific type of financial product.

When applying for a reverse mortgage, it’s the duty of counselors and loan officers to inform you of the many details surrounding the process and the loan itself. You must be aware of the fine print in these documents to avoid any unpleasant surprises later on.

So, take caution with the following reminders:


The home being used in a reverse mortgage must be your primary residence, which requires that you must live there for at least 183 days per year.

You can only live out of the home for a total of 12 months – for durations longer than that, you need to discuss with your lender if they will allow it. For example, you may need to stay in a long term care facility or you might find an extended work opportunity out-of-town.

On Age Qualification

To qualify for a reverse mortgage, the homeowner must be 62 years old, and this age requirement applies to all persons listed on the deed of the home. If a spouse is under 62, their name cannot be included in the title and must be removed in order to qualify for the reverse mortgage.

Only those who are listed on the title are considered owners of the home. Once the owner/s passes, the surviving spouse or the heirs become responsible in settling the loan account.


Heirs who inherit a property used as collateral in a reverse mortgage must pay off the loan’s outstanding balance, either by using other resources or by selling the home.

When the home is sold this way, any remaining balance after the reverse mortgage is paid transfers to the heirs. If the home is sold at a price less than the outstanding amount of the loan, the heirs will not owe more than the balance, under HECM rules.


If you have an existing mortgage on the home, you must pay it off first as a requirement in getting a reverse mortgage. As an option though, you can apply for a reverse mortgage and use the proceeds to pay off the current mortgage. The reverse mortgage then becomes the only lien on the property.

Homeowner Responsibilities

The homeowner is still responsible for keeping up with property taxes, homeowner’s insurance and other related fees. If you are unable to do so, your loan may go into default.

You are also responsible for maintaining your home up to FHA standards. Repair costs can be paid off through the reverse mortgage proceeds if allowed; otherwise, you will need to shoulder the fees.

Caution when Applying

You are not required to buy any other financial product in order to get a reverse mortgage. If your lender, loan officer or agent says that it’s a necessary condition, report them immediately to HUD.

Next topic: Steps in Getting a Reverse Mortgage


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