Can You Lose Your Home?

This is a common question and a legitimate concern. The most common way people lose their homes is through non-payment of mortgage. With a standard mortgage, if you fail to make your monthly payments, the lender can repossess your home. With a reverse mortgage, there are no monthly payments, so there is no way you can lose your home through non-payment.

By the same token, seniors may be concerned about outliving the loan. This is impossible. The loan is meant as a way to allow you to stay in your home for as long as you live, however many years that may be. The insurance premiums you pay that are included in your loan costs provide this guarantee.

If you choose the option of receiving monthly payments for life, even if you live much longer than expected and the total amount of payments exceeds the value of the house, your home still cannot be taken away, and the loan will not be due for as long as you continue to live in the house. This is a loan Methuselah would have loved!

And what’s more, regardless of how much you receive, you (or your estate) will never owe more than the home’s value, since a reverse mortgage is a non-recourse loan. Your heirs will not lose anything that is rightfully theirs, and neither the lender nor the insurance company can attempt to collect any difference that exists between the amount due and the home’s value from you or your heirs.

The only way you can lose your home is if you fail to keep up the home-related obligations that you normally have apart from the reverse mortgage, such as property taxes and insurance.