When does a reverse mortgage typically become due and payable?
Correct Answer
C) When the borrower permanently moves out of the home or passes away
A reverse mortgage becomes due and payable when the borrower no longer occupies the home as their primary residence (such as moving to assisted living permanently), when the borrower passes away, or when the borrower fails to meet loan obligations like paying property taxes and insurance. The loan is not based on a specific term length like traditional mortgages.
Why This Is the Correct Answer
A reverse mortgage becomes due and payable when the borrower no longer occupies the home as their primary residence (such as moving to assisted living permanently), when the borrower passes away, or when the borrower fails to meet loan obligations like paying property taxes and insurance. The loan is not based on a specific term length like traditional mortgages.
More Mortgage Knowledge Questions
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A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
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A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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At a refinance closing, the borrower's spouse, who is not on the loan but is on the title, refuses to sign the mortgage documents, claiming they were not properly notified. The borrower insists on proceeding. What should happen?