Yes the homeowner still has to pay property taxes and home insurance. This has to be maintained on a reverse mortgage just like on any other home loan.
Few things to know about Reverse Mortgages;
- Government regulations require that all reverse mortgage lenders operate under the same guidelines. Assuring borrowers that as long as they are using an approved lender and obtaining an FHA insured reverse, the loan will have all the consumer protections required in the program. HUD regulates the interest rates and fees.
- Choose a lender whose resources assure you the greatest depth of knowledge, and one whose expertise will make the program easy to understand and the process simple.
- Do not recommend using someone from out of state or out of your area. Your local lender who is an approved lender will understand the details of the program and will be there to meet you face to face and throughout the transaction
- A reverse mortgage gives you access to a portion of the equity in your home. You decide the amount of available funds to draw, and interest is assessed only against what you draw – when you draw it. Funds you do not draw remain as equity in your home. You are not required to make payments on these drawn funds. When you or your heirs sell the home, the equity you drew and the interest that accrued will be deducted from the sale and all remaining profits is yours or your heirs. If there are no profits or home sells for less than funds drawn; you or your heirs are NOT responsible for the difference.
- You will have sole discretion as to how you draw your funds. You will declare your choice prior to closing. Should you ever need to change that way you are receiving your funds, you may request it at any time.
- Your requirements in the loan are: 1. at least one of the borrowers must occupy the home as their primary residence; 2. You must keep your property taxes current; 3. You must keep current and adequate homeowner’s insurance; 4. Perform whatever routine maintenance is nescessary to keep your home in good repair.
- Eligibility for this loan is not based on your credit rating. However if you have outstanding judgements those may or may not need to be paid but the proceeds from the mortgage could be used to do this if necessary.
Hope this helps….