Yes. Reverse mortgage pitfalls are real, and these loans are not a carefree solution to your financial issues as you transition into retirement. These loans are as binding as any other, and while your home is generally much safer when you purchase a reverse mortgage, you are still required to fulfill certain obligations. Simply living in your home is one of them.
And while living in your own house certainly seems like a given, many people do not understand the consequences. If you move out or decide to sell your home while a reverse mortgage loan is active, you will trigger a loan default that may result in a foreclosure.
And that’s not all.
You also risk losing your home if you do not live in it as your primary residence, or even if you are away from the house for more than 12 consecutive months. In fact, you are required to live in the home for more than six months each year, excluding some medical reasons that can keep you away from it. And you are required to maintain it according to FHA reverse mortgage requirements.
Other issues that may result in losing your home have to do with not paying taxes and homeowner’s insurance, or if you pass away without listing your spouse or partner on the loan as a co-borrower or non-borrowing spouse.