Do I still need to pay my property taxes and home insurance with a reverse mortgage loan?

Yes. Reverse mortgage loans do not change your obligation to pay your homeowner’s insurance and taxes. If you don’t pay your insurance and taxes, or if you allow the condition of your property to deteriorate without making the necessary repairs, you will be considered in default on your loan. If you don’t work with your lender to resolve the situation, the lender could foreclose on your home and you could be forced to move. Learn more about what to do if you are having trouble paying your taxes and insurance.

For many people, it is much easier to pay taxes and insurance in 12 small monthly installments than it is to pay a large bill once a year. When you were buying your home with a traditional mortgage, chances are you paid your taxes and insurance to your lender as part of monthly mortgage payment. This is called an escrow  arrangement.

Starting in early 2014, reverse mortgage lenders will begin offering similar escrow arrangements for reverse mortgages. Under a reverse mortgage escrow arrangement, you make monthly payments to your lender for taxes and insurance, and your lender takes care of paying the tax and insurance bills. For some borrowers with limited income, escrow arrangements may be required. If you are interested in setting up an escrow arrangement, ask your lender.


If you need help paying your property taxes, you may qualify for a low-cost, single-purpose loan in your area or other assistance. Area Agencies on Aging (AAAs) generally know about these programs. To find the nearest agency, visit their website or call (800) 677-1116. Ask about “property tax deferral” or “property tax postponement” programs, and how to apply.

You can also call your local county tax assessor and ask about senior “circuit breaker” programs, which are government-funded programs that may provide a direct cash grant or tax credit to help people who need help paying property taxes, mobile home taxes, rent or nursing home charges.

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