One of the many misconceptions about the reverse mortgage program is that once you have one, all your payments are done. While this is true about mortgage payments, this is not true about all your payments.
The reverse mortgage allows seniors who are 62 and older who have enough equity the opportunity to refinance their current mortgage onto the HECM program and get rid of their monthly mortgage payment. There is no income, asset, or credit needed to qualify; your eligibility is based off of 4 things, your age, equity, occupancy (the home must be your primary residence), and type/condition of the house. As long as you meet these conditions you can get a reverse mortgage and never have to worry about a monthly mortgage payment again.
Most people think that there is no way to default on a loan that requires no payment. While that makes sense, with the reverse mortgage that is not the case. This program requires no monthly loan payment to the bank, but if you don't pay your property taxes and insurance you have technically defaulted on the loan and the lender can foreclose. Currently about 58,000 seniors with a reverse mortgage or approximately 1 in 10 are in default for not staying current on taxes and insurance.
For most people with a reverse mortgage the program is a lifesaver; allowing them to now fully retire! This is the reason the program was created, but if you are considering a reverse; please remember YOU STILL OWN YOUR HOUSE! You still have to maintain the property, and keep taxes and insurance current. If you get a reverse mortgage, you have not sold your home to the bank or the government, it along with all the responsibilities of ownership along with the equity are yours.