how hecms work
HECM Repayment Guidelines
HECMs work the same way as most other reverse mortgages. The loan balance that’s accrued must be repaid when the last borrower dies or leaves the home. Which of these other situations may compel you to repay the loan earlier?
- You don’t keep up routine maintenance on your home.
- You allow your children to live with you.
- You receive Medicare or other government benefits.
“A” is correct. Early repayment may also be required if: 1) you and all the other loan borrowers permanently move to another principal residence or are unable to live in the home for 12 sequential months due to physical or mental difficulties; 2) you fail to make the necessary property tax and hazard insurance payments; or 3) you violate other terms of your loan agreement.