How Reverse Mortgage
Payoff Actually Works
A reverse mortgage doesn't require monthly payments while you live in your home — but the loan will eventually need to be repaid. Understanding how and when payoff happens is essential for you and your heirs.
When the Loan Becomes Due
The loan must be repaid when the last borrower dies, sells, or moves out permanently (12+ months away from the home).
Heirs Can Keep the Home
Heirs pay 95% of appraised value or the loan balance — whichever is lower. They have up to 12 months to decide.
Non-Recourse Protection
You or your estate will never owe more than the home's value — even if the loan balance exceeds the appraised amount.
Timeline & Flexibility
Heirs typically have 30-60 days after notice to begin the process, with extensions available in most cases.
Your Repayment Options at a Glance
Sell the Home
The most common path. Sale proceeds pay off the balance and any remaining equity goes to you or your heirs.
Pay Off the Balance
Heirs can keep the home by paying the balance outright — using savings, inheritance, or a new mortgage.
Refinance the Loan
For surviving spouses or heirs, refinancing into a traditional mortgage can keep ownership while spreading payments.
Deed-in-Lieu
If the home is underwater, heirs can give the deed to the lender — no foreclosure, no deficiency judgment, no credit damage.
