There are different types of reverse mortgages. While they differ slightly, they all share a set of common features. Here are some features that are common to all reverse mortgages:
- Unlike regular mortgages, you can for any reason choose to cancel the loan. But you must do it within three days of closing the loan. These three days are three business days, which do not include holidays. The cancellation, however, must be done in writing and sent by mail or fax. It cannot be done in person or over the telephone.
- The loan must be repaid when the last surviving borrower dies, sells the home or moves out. But there are other situations in which a lender can ask for full repayment before then. Those situations are:
- Failure to pay your property tax
- Failure to keep up your home
- Failure to insure your home
If any of these things happen, the lender can ask for full repayment early. As with regular mortgages, you can be considered in default if:
- You declare bankruptcy
- You donate or abandon your home
- You commit fraud or misrepresent yourself
- Your property is condemned
