Can you pay back a reverse mortgage?

Can you pay back a reverse mortgage?

Reverse mortgages offer a unique way for seniors to access the equity in their homes to improve their retirement cash flow. But unlike traditional mortgages with monthly payments, repayment with a reverse mortgage works differently. Let's explore the intricacies of repayment with this loan option.

The Reverse Repayment

The core concept of a reverse mortgage is that you don't necessarily have to repay the loan during your lifetime. You access funds through a line of credit, a fixed sum, or monthly payments, and the loan becomes due when you no longer live in the home. This typically occurs when you move out permanently, sell the house, or pass away.

Early Repayment Options

However, you do have the option to repay a reverse mortgage early, even if you haven't moved out. Here are a few ways to achieve this:

• Lump Sum Payment: You can use your own savings, proceeds from selling other assets, or a gift from a family member to pay off the entire loan balance and accrued interest.
• Refinancing: You can refinance your reverse mortgage into a traditional forward mortgage. This would require you to resume making monthly payments; reducing your monthly cash flow.

The Bottom Line

While repayment isn't mandatory during your stay in the home, you can choose to pay off a reverse mortgage at any time; just like a regular forward mortgage.

To learn more about reverse mortgages and to find out if one is right for you visit https://reganteam.com/reverse-mortgage/ or call 707-508-8473