What Happens To A Reverse Mortgage After The Person Have To Go To Nursing Home. How Does That Work?
What happens to a reverse mortgage after the person have to go to nursing home. How does that work?
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Generally, the loan ends when the homeowner dies, sells the house, or, depending on the loan conditions, moves out of the house for 12 consecutive months (for example, to go into an assisted living home or due to physical or mental illness the borrower is not able to live in the property on which the loan has been taken. At that point, the reverse mortgage can be paid off with the proceeds of the sale of the house, or if the borrower has died, the property can be refinanced by the heirs of the homeowner’s estate with a regular mortgage. If the proceeds exceed the loan amount including compounded interest and fees, the owner of the house receives the difference. If the owner has died, the heirs receive the difference. For cases where the proceeds are not sufficient to pay off the loan, then the bank (or insurance which the bank has on the loan) absorbs the difference. So, in your scenario, it would depend on the loan conditions.
Depends. If short term nursing care with expectation to return home nothing. If long term nursing without expectation then then the “reverse mortgage” which is in reality a loan is due to be paid off. Each contract will go into specifics as to what is short term verses longterm care.
It depends on the contract but usually the house goes to the mortgage company. Most contrcats state the hous ebelongs to the owner until they die or are no longer able to reside there.
Check the contract.
In most cases, as soon as they vacate the home used as security, the loan must begin repayment.
Talk to the lender
The money flows as long as someone is alive. I believe the mortgage company cannot take the home ’till death.