The loan may be for a certain number of years which is known as a “term” loan, or for an undetermined length of time which is known as a “tenure” loan. A tenure loan matures upon an event such as when the last surviving borrower dies, sells the home or fails to live in the home for 12 months in a row.

You may have to pay the loan back if the lender determines that a change has been made that could affect the security of the loan like renting out part or all of your home, adding a new owner to the title, changing your zoning classification or taking out new debt against your home.

If you sell the house, you can pay back the loan from the money you get from the sale. If the balance of the loan is less than the value of the home at the end of the loan period or the money you get from the selling the home at any time, then the lender gets paid the amount owed, and you or your heirs keep the rest. Any heirs to the home can pay back the loan. The homeowner or the heirs can take out a new forward mortgage on the home.

The lender must also give you a description of the relevant features of the reverse mortgage being offered. This should include the following information:

• The interest rate to be charged and whether it is fixed, variable or both;
• Interest accrues from the time monies are advanced to you and the interest is compounded;
• All fees, costs and payments that must be paid by you;
• A description of any refinancing features that you have discussed;
• Any events that could terminate the reverse mortgage such as death or moving from the residence;
• A description of any shared appreciation or equity participation features; and
• A toll-free telephone number and the name of a person who can answer any questions, comments or complaints that you may have. If there is no toll-free telephone number, they must accept collect calls.