When a Reverse Mortgage Becomes Due

Understanding "Due & Payable"

A reverse mortgage becomes due and payable when:

• The last surviving borrower passes away
• The borrower sells the property
• The borrower no longer occupies the property as primary residence
• Borrower fails to pay property taxes or maintain insurance

Heirs Often Decide Quickly

After the borrower's death, heirs typically have limited time to:

• Pay off the loan balance (or 95% of the home's appraised value, whichever is less)
• Sell the property to pay off the loan
• Transfer title and walk away (non-recourse loan)
• Work out alternative arrangements with the lender

Options Available

• Sell the property — Use proceeds to pay off the reverse mortgage
• Refinance — If heirs want to keep the home
• Deed in lieu — Transfer to lender to avoid foreclosure
• Walk away — Non-recourse loans mean no personal liability