• Question
  • is the payback by heirs ever more than what house is worth

    Asked by a 72 year old woman from Millbrook, AL on 6/3/2017

    I am a bit confused about the info presented concerning what heirs will owe, If what heirs can sell house for is "lLESS" than loan amount, will they then be left owing the remainder of the loan amount? It seems they will even though you state heirs will never owe more than the value of the home. What happens then? How can a loan be given when this could happen?

  • Categories: Reverse Mortgages, Reverse Mortgages & Heirs


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  • The reverse mortgage is a government-backed program - much like the first-time home buyer program. The government guarantees to the lender that when the borrower passes, if the home is worth less than the remaining balance, the government will make the lender whole. The heirs do not owe the difference, and the lender cannot go after the heirs. So if the home is worth less than the remaining balance, the heirs would walk away from the home. If the home is worth more than the remaining balance, the heirs would sell the home and keep the difference. You can learn more on the hud.gov site:

  • Login to rate this answer:   Answered on 6/5/2017
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.