Your HECM Reverse Mortgage After Closing: What to Expect Throughout the Life of Your Loan
Part 2 of 4 in the Series
Understanding Your HECM Reverse Mortgage: A Guide for Borrowers and Families
You’ve closed on your reverse mortgage—now what?
For many homeowners, obtaining a Home Equity Conversion Mortgage (HECM) is an important step toward creating greater financial flexibility in retirement. Whether your goal was to eliminate required monthly principal and interest mortgage payments, establish a line of credit, supplement retirement income, or purchase a new home, understanding what happens after closing can help you manage your loan with confidence.
In Part 1 of this series, we walked through the HECM process from your initial consultation and required counseling session through application, underwriting, closing, funding, and servicing.
This second article explains what to expect throughout the life of your loan, including your ongoing responsibilities as a homeowner, the role of your loan servicer, frequently asked questions, and practical steps that can help keep your reverse mortgage in good standing.
Note: This article applies specifically to FHA-insured HECM reverse mortgages.
Life After Closing: What Changes?
One of the most common questions borrowers ask after closing is:
“What happens now?”
For most borrowers, the answer is reassuring: Daily life remains much the same.
You continue living in your home.
You continue owning your home.
And you begin enjoying the financial flexibility your reverse mortgage was designed to provide.
If your HECM paid off an existing traditional mortgage, you have replaced a loan that required monthly principal and interest payments with one where those payments are optional.
That may help improve monthly cash flow and create greater financial flexibility throughout retirement.
Although required monthly principal and interest mortgage payments are not required, you remain the homeowner and must continue to:
- Live in the home as your primary residence
- Pay property taxes
- Maintain homeowners insurance
- Pay homeowners association dues, if applicable
- Keep the property in reasonable repair
These responsibilities are similar to those of any homeowner.
Meet Your Loan Servicer
After your reverse mortgage closes, the company that originated your loan may no longer be the company that services it.
Instead, your loan will typically be managed by a loan servicer. For reverse mortgages originated by Fairway today, servicing is generally handled by Celink, one of the nation’s largest and most experienced reverse mortgage loan servicers.
If your reverse mortgage was originated a while back, however, it may be serviced by another company. Review your loan documents or most recent mortgage statement to confirm the name and contact information of your current servicer.
Celink Contact Information
Celink Reverse Mortgage Servicing Department
P.O. Box 40724
Lansing, MI 48901
Email: bc@reversedepartment.com
Toll-Free: 866-654-0020
Within the first few weeks after closing, you will generally receive a welcome package containing important information about your loan, including:
- Your loan number
- Servicer contact information
- Instructions for creating an online borrower account
- Information about your line of credit, if applicable
- Servicing forms and helpful resources
Your loan may also be sold to an investor. If that happens, you will receive written notification.
A sale of the loan or transfer of servicing does not change the contractual terms of your reverse mortgage. Your loan balance, interest-rate provisions, available line of credit, and borrower protections remain governed by your loan documents.
Your Loan Servicer Is Your Primary Resource
Throughout the life of your HECM, your servicer manages most of the daily administrative responsibilities associated with the loan.
Your servicer can assist with:
- Monthly loan statements
- Line-of-credit advance requests
- Scheduled monthly advances, if applicable
- Updating your mailing address or contact information
- Payoff requests
- Property-tax and insurance questions
- Annual occupancy certifications
- Guidance when the loan eventually becomes due and payable
For most questions involving the ongoing administration of your reverse mortgage, your loan servicer should be your first call.
Manage Your Loan Online
Most reverse mortgage servicers offer secure online account access.
Depending on the servicer, your online account may allow you to:
- View your current loan balance
- Monitor your available line of credit
- Request line-of-credit advances
- Track pending requests
- Access statements and servicing forms
- Review payoff information
If your HECM includes a line of credit, you borrow only what you choose to access.
Any remaining available funds stay in the line of credit until you request them, subject to your loan terms..
Keep Your Information Current
Life circumstances can change over time.
You may change your mailing address, switch banks, establish a living trust, appoint someone under a Power of Attorney, or spend an extended period away from home.
Notify your loan servicer whenever a significant change occurs so your account information remains current and the servicer can continue communicating with you effectively.
One important annual requirement is the Occupancy Certification.
Each year, your servicer will ask you to confirm that the property continues to be your principal residence. Complete and return this form promptly to help keep your loan in good standing.
Your Ongoing Responsibilities as a Homeowner
Although your HECM does not require monthly principal and interest mortgage payments, several homeowner obligations continue throughout the life of the loan.
Continue Living in the Home
A HECM is intended for your principal residence.
Temporary travel, vacations, and seasonal living arrangements generally do not create a problem. However, the loan may become due and payable if:
- You permanently move from the home
- The home is no longer your principal residence
- The last remaining borrower lives outside the home for more than 12 consecutive months because of a physical or mental illness
Contact your loan servicer before an extended absence if you are unsure how it could affect your loan.
Pay Property Taxes
Property taxes remain your responsibility.
If you anticipate difficulty making a tax payment, contact your servicer as soon as possible. Addressing concerns early may provide more options than waiting until the taxes become delinquent.
Maintain Homeowners Insurance
You must keep adequate homeowners insurance in force.
If your policy lapses, your servicer may obtain force-placed insurance on the property. This coverage may be more expensive and may provide more limited protection than a policy you purchase yourself.
Notify your servicer promptly if you change insurance companies or receive a cancellation or nonrenewal notice.
Maintain the Home
Borrowers are expected to keep the property in reasonable condition.
Routine maintenance may include:
- Repairing roof leaks
- Fixing broken windows
- Addressing plumbing problems
- Maintaining heating and cooling systems
- Correcting health or safety concerns
- Keeping the home structurally sound
Maintaining the property helps protect your investment and supports your ability to remain safely and comfortably in your home.
Pay HOA Dues
If your property belongs to a homeowners association, condominium association, or similar organization, applicable dues and assessments remain your responsibility.
Understanding a Life Expectancy Set-Aside
Some HECM borrowers have a Life Expectancy Set-Aside, commonly called a LESA.
A LESA reserves a portion of the reverse mortgage proceeds to help pay future property taxes and homeowners insurance.
Depending on the terms of the loan, the servicer may:
- Pay these expenses directly
- Release reserved funds when payments become due
A LESA is intended to help borrowers satisfy their property-charge obligations and keep the loan in good standing.
Your loan servicer can tell you whether your HECM includes a LESA and explain how it is administered.
Communication Is One of Your Best Protections
One of the most important things you can do throughout the life of your reverse mortgage is maintain communication with your servicer.
Reach out early if you have questions about:
- Property taxes
- Homeowners insurance
- HOA dues
- Your line of credit
- Storm or property damage
- An extended absence from the home
- Changes to ownership or a trust
- Difficulty meeting a loan obligation
Prompt communication can often prevent a manageable issue from becoming a larger problem.
Your Loan Servicer Is Your Primary Resource
Many adult children and other family members have never encountered a reverse mortgage.
A simple conversation can prevent uncertainty and make it easier for a loved one to assist you later if necessary.
Consider telling your family:
- That you have a reverse mortgage
- Which company services the loan
- Where your loan documents are stored
- Whom they should contact with questions
- Your wishes concerning the home
You may also want to keep the servicer’s contact information with your estate-planning and other important financial documents.
Frequently Asked Questions
Can I make payments on my reverse mortgage?
Yes.
Although monthly principal and interest mortgage payments are optional, you may make voluntary payments at any time without a prepayment penalty.
Can I pay off the loan early?
Yes.
You may repay part or all of your reverse mortgage whenever you choose.
However, the loan balance should not be paid down below a $100 loan balance if the borrower wishes to keep the mortgage active and preserve the line of credit.
Can I sell my home?
Yes.
You retain ownership of the property and may sell it whenever you choose.
At closing, the reverse mortgage is repaid from the sale proceeds. Any remaining equity after repayment of the loan and customary selling expenses belongs to you.
Can I use a reverse mortgage to buy another home?
Yes.
The Home Equity Conversion Mortgage for Purchase, commonly called an H4P, allows eligible borrowers to purchase a new principal residence by combining a required down payment with reverse mortgage proceeds. After the purchase is complete, the loan functions like a traditional HECM.
Can I refinance my reverse mortgage?
Possibly.
Depending on your circumstances, refinancing may provide access to additional proceeds or better align the loan with your current financial goals.
A reverse mortgage professional can help you evaluate whether refinancing may be appropriate.
Be Alert for Misleading Solicitations
After closing, you may begin receiving advertisements and solicitations related to your mortgage because certain mortgage information may appear in public records.
Some mailings may look official even though they are not affiliated with Fairway, your loan servicer, FHA, or HUD.
Be cautious of communications that:
- Use urgent or alarming language
- Suggest immediate action is required
- Imply that a home warranty is mandatory
- Resemble official lender or government correspondence
- Request personal or financial information
You are not required to purchase a home warranty or other private product to keep your HECM in good standing.
If you receive a communication that seems questionable, contact your loan servicer or reverse mortgage professional before responding.
Final Thoughts
A reverse mortgage is designed to support your financial goals throughout retirement—not simply on the day the loan closes.
By understanding your responsibilities, keeping your information current, maintaining communication with your loan servicer, and helping your family understand the loan, you can manage your HECM with greater confidence and peace of mind.
Continue the Series
Most reverse mortgages remain in place for many years. Eventually, however, every loan reaches the point when repayment is required.
The next article explains when a HECM becomes due and payable, what that phrase means, and the options generally available to borrowers, estates, and heirs.
▶ Read Part 3: When Your HECM Reverse Mortgage Becomes Due and Payable: Understanding Your Options
Missed Part 1? Start at the beginning of the reverse mortgage journey: Part 1: The HECM Reverse Mortgage Process: What to Expect from Application to Closing