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If I have a home with 100% equity and take on a reverse mortgage that provides me with monthly payments, is it possible that my monthly payments stop before I die because my equity drops to zero?

By Brian V. on 12.26.2018

Hello Brian,

Your question depends on the type of reverse mortgage you chose.  There are five options available for obtaining a reverse mortgage, each with its own characteristics:

Fixed Rate Reverse Mortgage: This option allows you to receive a one-time, lump-sum payment of the available funds at the closing.

Line of Credit: With the line of credit, you can access cash as needed until you've withdrawn the entire available amount. After that, you can continue to live in the home but won't be able to access additional funds.

Term Option: You can opt for a monthly payment of your choosing for a specified period. (E.g., 5 years, 10 years). Once you've used all the available funds, these payments will stop.

Tenure Option: This provides you with a monthly payment for life. The HUD calculator determines the payment amount based on factors like your age, interest rates, and property value, and it continues for your lifetime - as long as you live in your home and maintain taxes and insurance.

In addition to these four options, there are two more:

Modified Term: This allows you to allocate some of the funds to a line of credit for various purposes while the remaining funds are used for term payments.

Modified Tenure: Like the Modified Term, you can place some funds in a line of credit, with the rest used for tenure payments. However, the tenure payment may decrease if you allocate funds to the line of credit.


To ensure that your payments continue throughout your lifetime and address your specific concerns, consider one of the Tenure payment options. These options provide monthly payments for life, offering greater assurance that payments won't cease prematurely.

If you have any more questions or need further information, please feel free to reach out. Additionally, you can explore more details about what happens when your reverse mortgage funds are exhausted.


Also See: What Happens When Your Reverse Mortgage Money Runs Out?

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