While reviewing your financial situation, your loan officer will conduct a “Financial Assessment”. This is to ensure that you will have the financial means to continue paying your property taxes, homeowners insurance, HOA dues (if any), and maintenance charges. The HECM has options for borrowers that may have trouble continuing these payments.
Unlike a traditional mortgage loan, you are not required to make monthly mortgage payments with a HECM. However, you are still responsible for your property taxes, homeowners insurance, and home maintenance. Failing to pay would violate the loan terms and can result in the loan becoming due.
The loan will also become due when the borrower permanently leaves the house or passes away. Your heirs will never take on the debt, but like any loan, it must be paid back. The estate can sell the property to pay off the debt, use private savings, or the property can be purchased for 95 percent of its current appraised value.
To learn more and to see if a reverse mortgage is right for you, contact us today and set up a free no-obligation analysis with one of our licensed specialists.