Reverse Mortgage

Reverse Mortgage Exit

Most reverse mortgages end when all borrowers have passed away. At that point, the full loan amount must be repaid*. This can be done in one of four ways:

• Pay it off with cash or by taking out a new loan

• Sell the home — either through a regular sale or a short sale (if the home is worth less than what’s owed)

• Transfer ownership to the lender through a deed-in-lieu of foreclosure

• Take no action and allow the lender to foreclose

Each option has its pros and cons, so it’s important to understand them before making a decision.

Borrowers might also choose to end their reverse mortgage early for other reasons, such as:

• Transferring full ownership to children or relatives

• Downsizing to reduce upkeep or repair costs

• No longer living in the home full-time (occupancy requirement not met)

• Refinancing into a regular mortgage to preserve home equity

*In some cases, repayment may be delayed if an eligible non-borrowing spouse or registered domestic partner still lives in the home.