Reverse Mortgage Information Center

If you have a reverse mortgage or are considering one, make sure you understand that there are responsibilities that you have, even though you don’t have any payments.

Let’s take a look at what you are required to do so you can keep your home and not break the rules. Most importantly, you are still required to pay your taxes and your homeowner’s insurance. Few people choose the tax reserve account, but even if you did, this money is set aside for a specific number of years and when it runs out, you will be required to pay your taxes and insurance on your own.

One of the advantages to living in Oregon is you have the option of deferring your property taxes. If you are considering a reverse mortgage, and you want to defer your taxes, make sure you do the loan first. If you don’t, you will have to re-apply for the deferral. Deferring your property taxes will possibly free up some very important cash, but don’t forget they are just deferred, not waived. They will have to be paid at some point, like upon a transfer of title or if you get a new loan.

Secondly, if you have any other items that are required to be paid like fire, flood, earthquake or hurricane insurance, you will need to keep paying these items as well. A reverse mortgage does not exclude you from these responsibilities. You also will need to maintain any of the association dues or condo fees or whatever version of homeowners association cost you may have. These are not removed when you get a reverse mortgage, and you will need to pay these when they are due.

If you take away the largest monthly expense most of us have, that being the mortgage payment, you will have more money available to spend on the other expenses or emergencies life throws at you. If you don’t have a mortgage and you do a reverse mortgage, you will see an increase in income or reserves that will cover some other monthly necessities. In either case, it will effectively be an increase in monthly income, since the expenses have been removed.

The last item that is your responsibility is to live in the home as your primary residence for at least six months of every year. You can be gone for up to a year, but the preceding six months and the six months following the one year away, you will need to be living in your home. This does not mean you can’t go somewhere for a week here and there. If the home is truly your primary residence, there will never be a problem.

What does it all mean to you? The reverse mortgage is a great way to decrease your expenses while possibly increasing your income. But you will still need to pay all the other bills associated with the property. If you do this, you will have a place to live for the rest of the time you are capable of living there.

Want more reverse mortgage information? You can get all the information you need on several HUD reverse mortgage programs in addition to answers for the questions you didn’t know you had. There is also a free reverse mortgage calculator.