Are reverse mortgages available if there is a tax lien?

4 answers | Last updated: Nov 26, 2016
Odette asked...

Can you get a reverse mortgage if there is a tax lien on the property?

Expert Answers

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for

When an application for a reverse mortgage is processed, the lender will immediately order a title search. Any tax liens will be uncovered by the title company and reported to the lender. The lender will then require that you pay off the tax lien with the proceeds from the reverse mortgage at the closing. This applies for all loans which are secured by the residence, which includes mortgages, home equity loans and lines of credit.

Community Answers

Dwight gordon answered...

Clarification on previous answer. Some Tax Liens affect TITLE and some do not, depending on your State of Residence other factors. The previous answer is correct in that any Liens against TITLE must be paid. In addition, all FEDERAL Tax Liens must be paid, since a Reverse Mortgage is a HUD/FHA mortgage and this is an FHA Requirement. However, certain TAX LIENS (i.e. State Liens) that do not affect TITLE and are not Federal in nature don't need to be paid at closing. Also, Federal Tax Liens must be re-filed after 10 years; Otherwise there is language in the Lien itself that releases the obligation at that time. The Lien will still show on Credit, but can be removed with a Credit Supplement. The Statute of Limitations on State Tax Liens (of course) varies by state.

Sjolley2 answered...

There is one reason to get a reverse mortgage: Use as a tool in your financial strategy, meets your financial goals, and provides financial security through retirement. A reverse mortgage is a complex financial instrument with lifelong consequences for seniors. You need financial and legal advice to understand those consequences and if they are acceptable to you because once you sign on the dotted line it is very difficult to recover from the financial damage. I welcome calls from consumers, consumer advocacy agencies, legal and financial professionals. Sandy Jolley, Reverse Mortgage Suitability and Abuse Expert.

A fellow caregiver answered...

Can you get a reverse mortgage if someone holds the tax certificate in NJ?