For many who have had a conventional mortgage on their home, they are familiar with the “maturity date”. But with a reverse mortgage, there is no maturity date, only a “maturity event”. So, what’s the difference?
A maturity date indicates the date which the borrower will make the final payment on the loan, including principal and interest. These are used with conventional mortgages.
A maturity event represents a specific event that takes place in the borrower’s life that signifies the loan has come due. Because reverse mortgage borrowers do not make monthly mortgage payments. many seniors see this as an advantage.
Here are some examples of maturity events:
- The property is no longer the borrower’s primary residence
- The property is sold or transferred out of the borrowers name
- The borrower (or last borrower on the loan) passes away
- The borrower moves away from the home for more than 12 consecutive months (such as moving into an assisted living facility)
- The borrower fall substantially behind on their property taxes, homeowners insurance, or HOA fees.
A reverse mortgage is available to seniors 62 and over, and this FHA backed loans allow the borrowers to live mortgage payment free. The funds are available in various different ways, including a line of credit, monthly installments, a lump sum, and even to purchase a home.
Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington. Contact Janis and learn if reverse mortgage is right for you.