By Admin on Sep 3, 2010 in Financial Services
Scenario: You have a reverse mortgage on a house. Your health has decreased to the point you can no longer live in the house. You plan to live with your children under their care. Can you rent the house out while under a reverse mortgage?
Additional Info:
As I understand a reverse mortgage, it does not have to be payed back unless you sell the house or you have died. The house in question in this economy will be pure luck to sell and will not be able to sell for even half of what its worth. Not a feesable option.
Thanks for the input!
Read your terms. It states it has to be your primary residence. If you move out it will be due in 1 yr. The mortgage is insured so if it sells for less the insurance will kick in. You CAN NOT rent it out….with that said there is no mortgage "police" but I think they send forms out to you checking periodically that you live there, if you lie about it you are committing fraud. Sell it and don’t let it burden you, if you owe more than it’s worth it will be forgiven. Best of luck.
skr | Sep 3, 2010 | Reply
Would be up to the lender. They would probably require an assignemnt of rents and leases.
wizjp | Sep 3, 2010 | Reply
No, as soon as it is no longer a primary residence the loan has to be repaid or the house turned over to the bank. You do not have to die, all you have to do is move somewhere else, a rest home, family member, whatever. You can not use it as income property.
Landlord | Sep 3, 2010 | Reply