How do you pay back a reverse mortgage?

A reverse mortgage introduces a bit more complexity for borrowers. In this arrangement, you settle your existing mortgage by leveraging your home equity. The equity first covers your outstanding mortgage, and the lender reimburses the remainder through a lump sum, a line of credit, or monthly payments.

Unlike a regular mortgage, you’re off the hook for monthly payments with a reverse mortgage. However, repayment kicks in if the borrower:

• Passes away
• No longer resides in the home or it ceases to be their primary residence
• Sells the home or transfers its deed
• Fails to meet loan obligations like insurance and property tax payments

Typically, the reverse mortgage is repaid using funds from selling the house. Alternatively, borrowers can explore options like refinancing the loan into a traditional mortgage or transferring the title to the lender, ensuring no outstanding obligations to the lender.