Question

What are some reasons why a reverse mortgage may become due and payable?

1) The homeowner no longer occupies the home as a principal residence
2) The homeowner fails to pay property taxes or homeowners insurance
3) The homeowner fails to maintain the home in good condition
4) The homeowner dies

Answer 1

A reverse mortgage may become due and payable if the homeowner moves out, fails to pay for taxes or insurance, does not maintain the property, or passes away.

Step-by-step explanation:

There are several circumstances when a reverse mortgage may become due and payable:

1. 
   
3. The homeowner no longer occupies the home as their primary residence.
4. 
   
6. The homeowner fails to pay property taxes or homeowners' insurance.
7. 
   
9. The homeowner does not maintain the home in good condition.
10. 
    
12. The homeowner passes away.

When a reverse mortgage becomes due, the borrower or their heirs must either pay back the loan or hand over the home to the lender. Failing to meet the obligations of maintaining the home, insuring it, paying taxes, or to continue living in it, compromises the agreement under which the lender provided the mortgage funds. Additionally, the lender is repaid upon the death of the homeowner, often through the sale of the home.