If you’re thinking about selling your house, but you’re worried about the reverse mortgage that you took out on it a few years ago, there’s good news: Selling a house with a reverse mortgage is more common than you might think.
Whether you are downsizing, relocating, or simply ready for a change, you can still sell the property when you have one of these loans. Understanding how the process works helps you plan and avoid surprises.
How a Reverse Mortgage Works During a Sale
A reverse mortgage allows homeowners of retirement age to tap into their home equity to generate income. People aged 62 or older can borrow money from a reverse mortgage holder without making monthly payments. The loan balance accrues interest and fees as it grows, and when it comes time to sell, the loan becomes due.
In most cases, the reverse mortgage payoff occurs at closing, using proceeds from the sale, just like a traditional mortgage. If the home sells for more than the balance owed, the seller keeps the remaining sale proceeds. If the house sells for less, most reverse mortgages are insured, so the homeowner never pays more than the home is worth.
Three Simple Ways To Handle Selling a House With a Reverse Mortgage
Selling a house with a reverse mortgage follows the same basic steps as a traditional home sale, with a few additional details. The first step is to reach out to your mortgage lender for the exact payoff amount. Depending on how much equity you have and whether the market is strong, selling a house with a reverse mortgage may leave you with more cash than expected after closing costs.
From there, you have three options:
A traditional REALTOR® listing. You can always put the home on the market with an agent, pay off the reverse mortgage and other costs (like real estate commissions, transfer taxes, and closing costs) at closing, and pocket the remaining home equity.
Sell to a cash buyer. Companies that buy houses “as-is” can close in days instead of months and handle the entire reverse mortgage payoff for you, and you’ll walk away with the rest of the proceeds.
Sell to family. A child or relative can buy the home, assume the reverse mortgage (if eligible), or pay it off with a new loan.
Cash buyers are often helpful when homeowners want a smooth, stress-free experience. If your house needs extensive work, selling to a cash buyer takes on that burden so that you can move on without additional expenses.
Ready To Move Forward?
Selling a house with a reverse mortgage really comes down to basic math: sale price minus loan balance minus closing costs equals cash in your pocket (or your heirs’ pockets). Most sellers walk away with money rather than owing it.If you are thinking about selling a house with a reverse mortgage, let Homerun Home Solutions LLC help make the process faster and easier. Reach out today at (484) 246-4894 to get a fair, no-obligation offer and eliminate the stress of selling.
