learn more about being reverse mortgages
in the event of my passing, will the bank take my house?
Guidelines - as well as the mortgage insurance - would restrict the note holder (bank) from simply taking your home upon passing. The fact is, once the borrower passes, the home is the property of the heir(s). The heirs can choose to refinance the home, pay off the reverse mortgage, or sell the home and pay off the reverse mortgage.
In the unlikely event that the loan balance is greater than the value of the home, many heirs choice to simply release the property back to the bank (deed-in-lieu of foreclosure). However, it's important to point out that at no time will the heirs be paying the reverse mortgage off with any additional funds other than what the home is sold for.
Also, the heirs will not be charged with a deficiency balance if the bank sells the home for less than what it is owed. Again, this is a non-recourse loan, the bank can’t and will not be coming for the negative balance if one exists.
more questions soon!
