What Maintenance Does A Reverse Mortgage Home Require? (2024 Edition)

Once you've settled into adult life and got your own place, suddenly keeping it in good shape becomes a big deal, doesn't it? And as time goes on and once you're settled in and retired, it's even more crucial to keep everything running smoothly.

But here's the thing - Taking care of your home is not just beneficial for your health and comfort needs, it's also super important for your reverse mortgage! Today, I'll discuss why home maintenance is crucial and offer practical tips for handling any maintenance issues or house repairs that arise. -

Understanding Reverse Mortgage Responsibilities

Reverse mortgage is one of the most convenient and accessible financial solutions for senior homeowners aged 62 and older. Without any monthly mortgage payments, it is suitable for individuals who have accumulated substantial equity in their homes.

But what happens after you start receiving the funds? Is that it? No, it doesn’t simply stop there! Reverse mortgages require you to keep your home well-maintained and manage some other important responsibilities.

• First off, to continue receiving the best reverse mortgage benefits, you need to keep up with property taxes. These are fees you pay to the government based on the value of your home.

• Then there's homeowners insurance, which protects your home in case of accidents or disasters.

• And lastly, of course, you need to take care of your home by doing maintenance tasks, like house repairs, fixing things that break or keeping the yard tidy.

Reverse Mortgage Home Maintenance Requirements

Do you know why home/property maintenance is important?

Those monthly payments you receive from your lender are based on your home’s value. It is used as a promise or guarantee to the lender. It means that if you can't pay back the loan for any reason, the lender can take the house to get their money back. That's not what we're aiming for, is it?

That's why it's crucial to maintain your house well and prevent it from losing value or any further financial risks. Here's a simplified breakdown of the main requirements for maintaining a home with a reverse mortgage:

• Regular Maintenance Tasks

  Homeowners must keep up with routine property maintenance tasks to ensure the home remains in good condition. This includes house repair tasks like fixing leaks, repairing broken appliances, cleaning gutters and downspouts, testing and replacing smoke detector batteries, trimming trees and shrubs to prevent overgrowth, and so on.

• Health and Safety Standards

  It's essential to maintain the home to meet health and safety standards. This includes addressing issues like pest infestations, keeping pathways clear, and ensuring that safety features like staircases and handrails are secure.

• Property Standards

  The home must meet certain property standards to qualify for a reverse mortgage. This includes having no chipping or peeling paint, functional plumbing and electrical systems, and cabinets with doors.

• Big Ticket Repairs

  If significant repairs are needed, seniors can opt for a "set aside" to cover the costs. This allows repairs to be completed after the loan closes, ensuring that funds are available for the work.

• Choosing Contractors

  Homeowners should carefully choose contractors for any house repair work. It's essential to check references and ensure that the contractor is reputable and capable of completing the necessary tasks.

• Completion of Repairs

  House repairs must be completed before the loan closes, especially if they are required to meet property standards. Homeowners should ensure that all necessary repairs are finished and approved before proceeding with the loan process.

Reverse Mortgage Financial Requirements

Apart from property maintenance requirements, when it comes to reverse mortgages, homeowners have to handle the financial side of things too. Here's what you need to know:

• Property Taxes: Homeowners must keep up with property taxes, paying them on time as per the schedule set by the local government.

• Home Insurance: It's essential to have a homeowner's insurance policy in place, covering risks like fire, natural disasters, vandalism, and theft. Homeowners are responsible for paying the premiums to keep the policy active.

• HOA Fees and Dues: If your property is part of a Homeowners Association (HOA), you'll need to pay any associated fees. These might include community or association dues that contribute to the upkeep of shared spaces.

Just in case you're thinking of moving or selling your home, make sure you meet all the requirements to pay off your reverse mortgage. Otherwise, you might hear myths about reverse mortgages, such as you can't sell your home while the reverse mortgage is active or that your kids have to pay back the loan.

How Do Repairs Impact Reverse Mortgage Closing?

Just as your reverse mortgage amount is determined by factors like your age, home value after appraisal, and credit history, unfinished repairs can affect the loan closing process.

You can cover these expenses yourself or utilize a repair set-aside, typically used when house repairs can't be finished before closing. The repair set-aside is a portion of your reverse mortgage funds.

These funds can be used if house repair costs are within 15% of your maximum claim amount or the total appraised value of your home. They're intended for urgent fixes such as:

• Paint peeling problems

• Bare wood surfaces

• Damaged concrete

• Broken glass

• Small-scale plumbing issues

While these are common examples, your specific repair needs may vary. However, all repairs should be completed within six months of the loan closing process.

Once repairs are finished, your loan servicer will verify their completion. Any remaining funds from the repair set-aside are then returned to your reverse mortgage account, available for your use.

If you wish to undertake additional work beyond what's required, you'll need to finance it yourself or utilize funds from your reverse mortgage.

DIY vs. Professional Maintenance: What's Right for You?

This is more like deciding whether to cook at home or eat out at a restaurant - both have their pros and cons, right?

• When you choose to DIY (Do-It-Yourself):

  You're taking on the responsibility of completing tasks without hiring outside help. This can be a great option for simple jobs that don't require specialized skills or equipment. DIY projects are often more budget-friendly since you're not paying for labor costs.

  However, DIY isn't always the best choice. If you're not skilled in a particular area, you might end up making mistakes that could cost you more in the long run. Plus, DIY projects can be time-consuming, especially if you're juggling other responsibilities like work or family.

• Hiring a professional means:

  You bring in someone with expertise and experience to handle the task for you. Whether it's plumbing, electrical work, or landscaping, professionals have the skills and tools to get the job done efficiently and effectively.

  While professional services come at a cost, they can save you time and hassle. You won't have to worry about making mistakes or spending hours trying to figure things out. Plus, professionals can often complete tasks faster and with better results than if you attempted them yourself.

6 Expert Tips for Addressing Common Issues

Now that you understand home maintenance is essential, in case of complicated house repair or property maintenance issues, use these tips to ensure you don’t find yourself scratching your head and confused about certain things!

• 1. Leaks

  Promptly address any leaks to prevent water damage and mold growth. Inspect and repair leaking faucets, pipes, and roofs as soon as possible. Consider hiring a professional plumber for complex leaks or water damage restoration.

• 2. Pest Control

  Schedule regular home inspections for pests to detect and prevent infestations. Seal cracks and gaps in walls, floors, and windows to prevent pest entry. Consult with a pest control professional for effective and safe treatment options if needed.

• 3. Energy Efficiency

  Upgrade insulation in attics, walls, and crawl spaces to improve energy efficiency. Replace traditional light bulbs with energy-efficient LED bulbs to reduce electricity consumption. Install programmable thermostats to regulate heating and cooling usage and save on energy costs.

• 4. Home Security

  Install and maintain security systems, including alarms, cameras, and motion sensors, to deter burglaries and intrusions. Reinforce doors and windows with sturdy locks and security bars to enhance home security. Trim trees and bushes near the house to eliminate hiding spots for potential intruders.

• 5. Appliance Maintenance

  Clean or replace air filters in HVAC systems regularly to ensure optimal performance and indoor air quality. Schedule professional maintenance for major appliances such as refrigerators, dishwashers, and washing machines to prolong their lifespan. Check dryer vents and exhaust ducts for lint buildup and ensure proper ventilation to prevent fire hazards.

• 6. Structural Maintenance

  Inspect the foundation, walls, and roof for signs of cracks, leaks, or structural damage. Repair damaged or deteriorating siding, shingles, and exterior surfaces to maintain the integrity of the home's structure. Consult with a structural engineer or contractor for assessments and repairs of significant structural issues.

Are You Ready to Future-Proof Your Home?

In a nutshell, looking after your home is a big deal, especially with a reverse mortgage in the picture. By staying ahead of maintenance tasks and fixing things up promptly, you're keeping your home comfy and secure.

Whether you're the DIY type or prefer to get some extra hands on deck, just remember - keeping up with repairs is the name of the game to protect your investment in the long haul. So, don't wait around - keep your home in tip-top shape and enjoy the peace of mind it brings!