“The security is there.”
Carol Ann and Ron
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With a Senior Equity Reverse Mortgage®, you don’t have to make any reverse mortgage repayments as long as you live in your home.
There are some circumstances that will cause the loan to mature and the balance to become due and payable.
The most common are:
- The last remaining borrower sells the home
- The last remaining borrower passes away
- The borrower fails to live in the home for more than 12 consecutive months
Other circumstances that may cause the loan to become due include:
- You transfer the title to another person or entity
- You fail to pay property taxes
- You fail to maintain and/or repair the home
- You fail to keep the home insured
Loan amount owed
You’ll never owe more than the appraised value of your home. When the loan balance becomes due and payable, your home will be re-appraised to determine its value. Based on the appraised value and the outstanding loan balance, two scenarios are possible:
The loan balance is LESS than the appraised home value: If the loan balance is less than the appraised home value, you or your heirs only owe the loan balance. So, if you sell your home, you or your heirs keep the difference between the appraised home value and the loan balance, less sales costs.
The loan balance is MORE than the appraised home value: If the loan balance is greater than the appraised home value, you or your heirs owe the appraised home value, but nothing more. You or your heirs may sell the home in order to pay the balance. Bank of America will cover the remaining difference between the loan balance and appraised home value.
Paying off your loan balance
There are two basic ways you can pay off the loan balance:
- Sell the home and use the proceeds from the sale1
- Use other sources of funding
Other sources of funding may include:
- Checking and savings accounts
- Investment and brokerage funds
- Sale of other real estate assets
- Funds from a new mortgage on the home
A Senior Equity Reverse Mortgage lets you make reverse mortgage repayments on all or part of the loan balance at any time. There are no pre-payment penalties.
Please note: Paying off a HECM loan terminates the agreement. This does not apply to the Senior Equity Reverse Mortgage Platinum product.
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Your Responsibilities
1 Bank of America may require approval of the final sale price.