Reverse Mortgage Payoff
DEAR BOB: I am a widow with a reverse mortgage on my house and I receive more income than I can spend. I set the excess aside for my grandchildren, who are teenagers. I enjoy my extra income, but what happens to my reverse mortgage balance when I die? Are my children responsible for selling the house and paying off the reverse mortgage balance? -- Gerta H.
DEAR GERTA: When you die or permanently move out of your home for more than 12 months, the reverse mortgage matures. Its principal and accrued interest come due. Your heirs can sell the house and use the proceeds to pay off the mortgage balance. The remaining equity is then distributed according to the terms of your will or, better yet, living trust.
If your heirs should wish to keep the house, they can refinance it to pay off the reverse mortgage balance.
Source: Bob Bruss
Free Reverse Mortgage Analysis
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