When do I have to pay back a reverse mortgage loan?
Reverse mortgage loans typically must be repaid either when you move out of the home or when you die. However, the loan may need to be paid back sooner if the home is no longer your principal residence, you fail to pay your property taxes or homeowners insurance, or do not keep the home in good repair.
Most reverse mortgage loans are Home Equity Conversion Mortgages (HECMs). A HECM must be paid off when the last surviving borrower or Eligible Non-Borrowing Spouse:
- Sells their home, or
- No longer lives in the home as their principal residence, meaning where they live for a majority of the year.
If the you are away for more than 12 consecutive months in a healthcare facility such as a hospital, rehabilitation center, nursing home, or assisted living facility and there is no co-borrower living in the home, anyone living with you will have to move out unless they are able to pay back the loan or qualify as an Eligible Non-Borrowing Spouse.
An “Eligible Non-Borrowing Spouse” is a term used for your spouse when they are not a co-borrower, but qualify under the U.S. Department of Housing and Urban Development’s (HUD) rules to stay in your home after you have died.