reverse mortgage basics

What You and Your Heirs Can Expect

Consumers sometimes worry a reverse mortgage will leave them without an estate to give to their heirs. How often is this true?

1. Never, because owners always have money left once their homes are sold.
2. Always, because once a home is sold and the loan balance is repaid, there is nothing left.
3. It depends on the price for which the home sells and how large the loan balance has grown.

“C” is correct. You or your heirs may keep whatever amount is left once your home is sold and your full loan balance is repaid. Also: If your home sells for less than the loan balance you owe, the lender cannot seek repayment from your income, other assets, or heirs. This is a non-resource loan.