When does my loan become due and payable?

Posted by OscarNOW 2:08 PM

A HECM loan must be repaid in full when you die or sell the home. The loan also becomes due and payable if:

  • You do not pay property taxes or hazard insurance or violate other obligations.
  • You permanently move to a new principal residence.
  • You, or the last borrower, fail to live in the home for 12 months in a row. An example of this situation would be if you (or the last borrower) were to have a 12-month or longer stay in a nursing home.
  • You allow the property to deteriorate and do not make necessary repairs.

Posted by OscarNOW on 2:08 PM. Filed under . You can follow any responses to this entry through the RSS 2.0

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A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

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