Reverse mortgages are loans you can repay without penalty whenever you want — meaning yes, you can sell your home with a reverse mortgage.
Selling a house with a reverse mortgage is similar to selling a home with a regular mortgage. Borrowers selling their home with a reverse mortgage will pay the loan balance and retain any equity.
If you want to sell your house with a reverse mortgage, follow a few easy steps:
Before you start trying to sell your home, talk to your loan servicer and find out how much you still owe. Contact the reverse mortgage servicer to learn more about the amount you owe and any potential fees. It’s helpful to get a payoff quote in writing and tell your servicer you intend to sell your home.
While this step is not a requirement, it may help you sell your home. A real estate agent can tell you your home’s worth and what you can sell it for. This information will let you know if you can afford to repay your loan balance.
A real estate attorney can help you work through all the complicated facets of selling your home and paying the reverse mortgage balance.
If you’ve hired a real estate agent, they will also help you with this process by taking pictures, setting up showings and marketing the property. Try to sell your home as close to your appraisal value as possible to ensure you have the funds to repay your reverse mortgage balance.
Once you have sold your home, you will need to use the proceeds to pay the reverse mortgage balance in full. You can then check with your servicer to ensure your account is closed.
You can still sell your home whenever you want if you have a reverse mortgage. However, you may encounter specific scenarios where you have no choice but to sell.
These scenarios are called maturity events, which trigger your reverse mortgage coming due. Maturity events include:
If a maturity event occurs, you need to sell your home. However, if none of these other events happen, selling your home becomes the maturity event, and you are good to go ahead.
You should be aware that there are certain home types that don’t qualify for reverse mortgages.
While the process might seem relatively straightforward, you might have other questions about selling your home with a reverse mortgage. Commonly asked questions include:
When you sell your home, the proceeds will first go toward paying the balance on your loan. Once that is paid off, you will want to pay off any fees associated with selling your home and liens on your house. Whatever money remains after is yours to keep.
If you look back to step one, you’ll see the recommendation to get in touch with your loan servicer and get a payoff quote in writing. This quote acts as the official notification process, letting your servicer know you intend to sell the house and close your account.
There are zero penalties for selling your home and repaying the balance due for your reverse mortgage loan.
If you’re considering selling your home while you have a reverse mortgage, rest assured there are several benefits. Some of the advantages of selling your home include:
Remember that selling your home when you have a reverse mortgage is your decision — sell it when you want, following the steps above.
Senior Lending Corporation works with homeowners to dispel any myths about selling their homes when they have a reverse mortgage with us. Contact our team by calling 800-822-1190 or filling out our form for more information about selling your house!