No, you are not required to pay off your home equity loan balance; however, if that is the case, we will require a subordination agreement, so it is possible that the other lender may want you to. A subordination agreement says that the lender of your home equity loan agrees to be third in line to the get your house, in the event that a foreclosure is needed. The first two in line would be the reverse mortgage lender (AAG, in our case) and HUD (the government). It is very unlikely that the other lender would want to be in this position, so it may be beneficial to you to pay off both your mortgage and your home equity loan balances with the proceeds of your reverse mortgage, if possible.

There are many other factors that come in when dealing with multiple current real estate loans. I recommend getting in contact with one of our Professionals, and we can walk you through the process and answer any of your questions and address any of your concerns.

Disclaimer: The response above is not intended to be anything other than the educated opinion of the author. It should not be relied upon as financial advice. America Advisors Group recommends speaking directly with an AAG Reverse Mortgage Professional regarding your specific situation and needs. Please call 1 (800) 466-0572 to receive AAG's information pack with a FREE DVD and Brochure featuring Former Senator Fred Thompson.