Can you lose your home with a reverse mortgage?

When does a reverse mortgage come due?

There's no monthly mortgage payment, but there are a few simple rules. The loan comes due when:

• The last borrower passes away or sells the home
• The last borrower moves out for good, including living in a care facility for more than 12 months in a row (for HECMs)
• Property taxes, homeowners insurance, or HOA dues don't get paid
• The home isn't kept in reasonable repair

Keep up with those, and you can stay in your home as long as it's your primary residence.

What trips people up most often?

Property taxes and homeowners insurance. Some people hear "no monthly payment" and assume that means no housing costs at all. You still pay your taxes and insurance, just like you do today. That's the one thing I make sure every client has a plan for.

How do I make sure I never have a problem?

• Plan for taxes and insurance up front. A HECM can set money aside from the loan to pay them for you, so you don't have to worry about it.
• Keep the house in good shape, and open any mail from your loan servicer right away.
• Send back the yearly occupancy form. It just confirms you still live there.
• If your spouse isn't on the loan, talk with us before closing about how they're protected.
• Keep your family in the loop, and let them know where the paperwork is.

What happens when I pass away?

Your family has options. They can keep the house by paying off the loan (usually with a regular mortgage), sell it and keep whatever equity is left, or simply hand it back. With a HECM, they won't owe more than the home is worth.

Example scenario (illustrative)

A couple in their late 70s have had a reverse mortgage for years. After they switched banks, their homeowners insurance renewal didn't go through, and their servicer sent a letter. Their daughter was listed as a contact, recognized what it meant, and got the policy reinstated within the week. Problem solved.

Our take

People almost never lose a home because of the reverse mortgage itself. When it happens, it's because taxes, insurance, or the paperwork slipped through the cracks. That's why I set every loan up with those costs covered and a family member in the loop. If you ever get a letter from your servicer you don't understand, call me. We'll sort it out together.