What if the decedent had a reverse mortgage on the home?

Question

Accepted Answer

A reverse mortgage lets homeowners who are at least 62 and have at least 50% home equity convert a portion of their equity into cash. When a homeowner has a reverse mortgage, the portion of equity the lender advanced to the homeowner (plus any outstanding interest) must be repaid when they move, sell the home or die.

If you keep the inherited home, you can refinance the loan, using your new mortgage to pay off the reverse mortgage. If you plan on selling, you’ll need to use the proceeds to pay off the remaining loan balance.