How Do You Sell A Home With A Reverse Mortgage?
Did you take out a reverse mortgage on your home assuming that you'd stay in the home for the rest of your life, only to have your plans change? Some homeowners with reverse mortgages remain in their homes simply because they assume that their reverse mortgage somehow prevents them from selling the home. This is simply not the case. If you have a reverse mortgage and have now decided that it's better for you to move elsewhere, you can sell your home. You'll just have to follow these steps, which are a bit different from the conventional steps one follows when selling a home without a reverse mortgage.
Step 1: Confirm how much you owe on your reverse mortgage loan.
Contact the company that issued your reverse mortgage loan. They should be able to tell you exactly how much is owed on the loan if you were to pay it back in full today. (You need to pay off the loan after selling the home.) The amount they give you will be equal to the amount you borrowed in the reverse mortgage, plus any interest and lender's fees.
Step 2: Find a realtor who has experience selling homes with reverse mortgages.
While you could simply have a realtor sell the home and then pay off the reverse mortgage lender yourself, this can get a little complicated. If you find a realtor who has experience with this process, they can coordinate with the reverse mortgage company on your behalf, saving you a lot of hassle. You'll also want a knowledgeable real estate attorney on your side. Your realtor should be able to recommend one if you don't know one. Your realtor will list the home for sale and work to find a buyer. The asking price for the home should be more than the amount you owe on the reverse mortgage.
Step 3: Sell the home and repay the reverse mortgage.
When your realtor finds a buyer, the buyer (or their bank) will pay for the home. The amount owed to the reverse mortgage company will be sent to them to pay off your loan in full. Make sure you get a document back from them that states that your loan has been paid off and your account has been closed. After your realtor takes out his or her commission and you pay your lawyer, the remainder of the sale amount is yours to keep.
Now that you're out from under your home with a reverse mortgage, you can use the remaining funds from the sale of your home to move into a place that's better suited to your current needs.
