Can my heirs keep or sell my home after I die?

Are you concerned about what will happen to a home with a reverse mortgage after you pass away? Do you want to ensure that your loved ones can inherit  property without having to go through the lengthy and costly probate process?

A reverse mortgage is typically marketed as allowing one to access the equity in a home while still maintaining ownership and control. However, unlike a traditional mortgage, no  monthly payments are made. So, with a reverse mortgage, heirs typically ask whether they can inherit the real property with a reverse mortgage on it, and without having to go through probate, which can be  costly, cost money, and stress.

When a borrower who owned real property with a reverse mortgage passes away, the loan becomes due and payable. This means that the borrower's estate must either pay the loan balance from cash available in the estate, or more often, sell the property to pay off the loan. Occasionally, the estate may be able to refinance the loan and keep the real property.

If the real property is sold, any proceeds above the amount owed on the reverse mortgage will go to the borrower's estate. If the real property is sold for less than the amount owed on the reverse mortgage, the borrower's estate will not be responsible for the difference because reverse mortgages are non-recourse loans.

If, you have any questions about what happens when a homeowner with a reverse mortgage passes away, contact us today to discuss your case.