Property Taxes and Reverse Mortgages
Prior to doing a reverse mortgage, you may be current, behind or have deferred your property taxes. This is OK. If you are behind or have deferred your property taxes, they will be brought current from your reverse mortgage proceeds. If you are current but they are due within 60 days of closing, your lender will also pay that installment out of proceeds.
Note: Effective April 27, 2015, the lender will take into account delinquencies and that may affect conditions required of you to qualify for the reverse mortgage.
After closing your reverse mortgage, you must stay current with your property taxes. The one exception is you may apply (or reapply if you previously had) for deferred property taxes. Your state or county must agree to subordinate to the reverse mortgage liens.
You may also sign up for an impound account so your property taxes are paid by the lender. The lender will usually hold three years of estimated insurance payments from the original proceeds. At the end of three years, they will need to do it again.
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