How moving to nursing home affects reverse mortgage

Reverse Mortgages For Dummies My 90-year-old mother-in-law has recently moved permanently into a [tag]nursing home[/tag]. She has a new [tag]reverse mortgage[/tag] on her free-and-clear home to pay her living costs. My husband will inherit her house when she passes on. At that time, we plan to demolish it and build new. What are the financial ramifications of renting the house to tenants until she passes away? He is reluctant, whereas I hate to see a nice house sitting there vacant that can bring in $2,000 monthly rent.

Because your mother-in-law permanently moved out of her principal residence, her reverse mortgage will become due and fully payable in full after 12 months of her non-occupancy of the house. Reverse mortgage lenders periodically check up on their borrowers to see if they (a) are still alive and (b) are occupying their primary residence (except for absences less than 12 months). If the house is rented to a tenant, when the reverse mortgage lender discovers the owner no longer lives there, the lender can require the loan balance be paid in full or it will be put into foreclosure. For more details, read the reverse mortgage documents and consult a local real estate attorney.

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