What scenario would typically trigger repayment in a Reverse Mortgage?

In the context of a reverse mortgage, repayment is typically triggered when a specific event occurs concerning the borrower's circumstances. The most common events that lead to repayment are the sale of the home or the death of the borrower.

When a borrower takes out a reverse mortgage, they do not make monthly mortgage payments; instead, the loan amount grows over time. The loan must be repaid when the borrower sells the home, moves out, or passes away. If the home is sold, the loan is paid off from the proceeds of the sale. Similarly, if the borrower passes away, the heirs or estate must either sell the home to repay the loan or pay back the amount owed if they choose to keep the home.

This mechanism ensures that while the borrower can access equity in their home during their lifetime, ultimately, the loan balance will need to be settled under these conditions, making them the most relevant scenarios for triggering repayment of a reverse mortgage.