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What to do if your home is affected by a natural disaster

Here on the Atlantic coast, we’re quite aware of the hurricane season – from June 1 to November 30. But no matter if it’s a hurricane or other natural disaster, damage to the home of a reverse mortgage borrower could affect a reverse mortgage borrower’s loan obligations. If you are a reverse mortgage borrower and your home is affected by a natural disaster, here is what you need to do.

Maintain Your Property

A reverse mortgage loan requires that the homeowners are responsible for the upkeep and maintenance of the home. If your home sustained damage from a natural disaster, here are the first immediate steps to take in order to fulfill your loan obligation:

  • Notify your insurance company as soon as possible to file a claim.
  • Contact your loan servicer and let them know about the damage.

The next steps will depend on the severity of the damage. Keep in close contact with your lender, insurance company, and the contractor making the repairs so that everyone is communicating and repairs are made.

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More on What to do After a Natural Disaster

Occupy your home

A reverse mortgage loan requires that the homeowner occupies the home as the principal residence. The terms of the loan state that if a homeowner is away from the house for 12 consecutive months for physical or mental illnesses, the loan is due. However, in the case a natural disaster forces you from your home, take these steps to fulfill your loan obligation:

  • Notify your lender or servicer that you will be away from your house during repairs, and will return as soon as the work is completed. 
  • Give your lender or service the address where you will be staying, and makes sure they have your updated email address and phone number.
Pay your property taxes

Another obligation of a reverse mortgage borrower is to pay your property taxes. If for some reason after a natural disaster you cannot meet this obligation, take these steps:

  • Contact your local tax accessor and ask about paying your taxes in installments. Make sure you let your lender or servicer know about any arrangement you make.
  • If you are having trouble making a payment, there may be a number of ways your lender or servicer can assist you. Contact them immediately to see what options you have.

When you contact your lender about damage from a natural disaster, it’s a good idea to do so in writing. Be sure to keep a copy of the letter for yourself and send it certified mail so that you have a paper trail to keep with your documentation. If you are interested in getting a reverse mortgage, and have any questions about obligations and requirements, speak with a Certified Reverse Mortgage Professional in your area.

Learn more about how people are using home equity conversion mortgages for purchasing homes:

Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines.