The Basics of Reverse Mortgage Repayment

Mortgage Newsletter
Privacy Policy

Check Local Mortgage Rates

Today's Average 0.00%



Loan Program Choices

Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator


The reverse mortgage is a popular type of loan that many senior citizens take advantage of. Many people use this as a way to create supplemental income for themselves during their retirement years. Before you sign up for this type of loan, it is important that you understand how the repayment process works. Here are the basics of reverse mortgage repayment.

Reverse Mortgage Payments

The reverse mortgage works differently than any other type of mortgage product on the market. Instead of paying the lender, the lender is going to be sending regular payments to you. These payments are going to be slowly purchasing the amount of equity that you have in your home. Because of this reverse payment system, many people are confused with how the lender gets their money back.

Selling the Home

One of the ways that the lender can be paid back is if you sell the home. Since the lender is going to own the equity in the home, you will need to reimburse them for this equity when the house is sold. This allows you to pay them back with one lump sum when you sell your house.


Some borrowers will end up refinancing the loan at some point. They might be able to gain access to extra equity by refinancing the mortgage into a more traditional loan. If you decide to do this, you will need to pay back the reverse mortgage at that point. You will then be free to keep any extra equity that you have in the property.

Life Insurance

Sometimes individuals that have reverse mortgages end up passing away before they can repay the mortgage. In the event that both spouses with a reverse mortgage pass away, part of the money from any life insurance settlement will need to go towards paying off the reverse mortgage. If a beneficiary receives a large lump sum from life insurance, they will have to use part of this money to pay off the mortgage before they can keep any of it.

Outliving the Loan

Many people wonder what will happen if they receive all of their equity payments. If this happens, you will not have to start making any payments to the reverse mortgage lender. You will be able to continue living in the property for as long as you want to. As long as you or your spouse are still alive and using the property as your primary residence, the lender cannot require you to make any type of mortgage payments. This creates a scenario where you have been paid for the equity in your home, but you can live in the property without paying rent or a mortgage payment for as long as you want. For many retirees, this creates an ideal scenario for their living arrangements. You will not have to make any type of repayment until you decide to sell the property or if you pass away.