Increasingly, older Americans are choosing reverse mortgages, typically to supplement fixed incomes from Social Security or pensions that are insufficient to cover basic expenses. A reverse mortgage allows elderly homeowners to tap into the equity built up in their homes while remaining in their homes. Reverse mortgages are often used to pay for home repairs, improvements, and maintenance, or to cover substantial medical expenses.
Reverse mortgages can be complex and expensive when all the fees are taken into account. The loan becomes due when the borrower dies, sells the home, or permanently relocates. If the borrower dies, the heirs will need to sell the house and repay the loan. What many people are unaware of is that there are a number of triggering events that can lead the lender to declare the loan “due and payable” and begin initiating foreclosure proceedings, while you are still living in the home.