Two Big Reverse Mortgage Ifs
Two Big Arizona Reverse Mortgage Ifs
If I have to move, is that going to be a problem for my Arizona reverse mortgage?
You knew that and had no problem living in your Boston suburb. You and your wife have lived here for a while and you love the area. You had no issues with the reverse mortgage or your situation. Then your doctor tells you that your health would be better served if you moved to a "drier climate, maybe Arizona." But what about the reverse mortgage?
The contract states that the loan doesn't have to be repaid until the homeowners pass away or cease to use the home as their primary residence. If you have to move, you would have to settle the loan. Most people sell the house and use the proceeds to pay the debt. If you don't wish to sell the house you will need to come up with another way to settle the debt prior to moving to Arizona.
If my house sells for more than the reverse mortgage debt, does the state get the money on an FHA insured loan?
This question revolves around the #1 myth regarding reverse mortgages. Many people believe that once a reverse mortgage is taken out, the lender owns your home. This is not really true. The lender does get to place a lien on your home as part of the mortgage terms but the the lender does not own your home. A reverse mortgage is a "non-recourse" loan, that is, the lender has no recourse to any other asset to pay the debt except for the house. The debt is limited to the house but the house does not equal the debt. The debt to be paid at the end of the term is all of the principal plus the interest due or the property, whichever is less. If you sell the house and the pay back the debt, what is left over is yours, not the lender's.
More Arizona Reverse Mortgage Loan Information:
Arizona Reverse Mortgage? | Is it right for you? | Arizona Reverse Mortgage Shopping | Truth in Lending Act | Two Big Ifs | Ways to Get Paid | Who and What? | Who Should Not Get a Arizona Reverse Mortgage?