Can you sell your house with a reverse mortgage? You betcha! This isn’t some dusty legal document; it’s a wild ride through the surprisingly straightforward process of unloading a home when a reverse mortgage is involved. We’re talking about understanding the nitty-gritty, navigating the financial labyrinth, and maybe even cracking a joke or two along the way. So buckle up, because selling a house with a reverse mortgage is less of a headache and more of an adventure.
We’ll dive headfirst into the essential conditions that allow you to wave goodbye to your home, the pivotal role your friendly neighborhood reverse mortgage lender plays, and a realistic look at the timeline. Plus, we’ll get you started with those crucial first steps, because who doesn’t love a good head start? Think of this as your roadmap to freedom, with fewer detours and more sunshine.
Understanding the Fundamentals of Selling a Home with a Reverse Mortgage
Selling a home that has a reverse mortgage might seem a little different, but it’s absolutely possible. The key is to understand how the reverse mortgage works and how it interacts with the sale. Think of it as a different chapter in your homeownership journey, one that can lead to a smooth transition.A reverse mortgage allows homeowners, typically those 62 and older, to convert a portion of their home equity into cash.
Unlike a traditional mortgage where you make payments, a reverse mortgage lender pays you. When it comes time to sell, the outstanding balance of the reverse mortgage, including accrued interest and fees, needs to be paid off. The sale proceeds are used for this, and any remaining equity belongs to you or your heirs.
Primary Conditions for Selling a Home with a Reverse Mortgage
The ability to sell a home with a reverse mortgage is generally straightforward. The primary condition is that the loan must be repaid. This is typically achieved using the proceeds from the sale of the home itself. If the sale price is more than what is owed on the reverse mortgage, the difference is yours. If, by chance, the sale price is less than the loan balance, the homeowner or their heirs are usually not responsible for the shortfall, thanks to non-recourse provisions common in most reverse mortgages.
The Role of the Reverse Mortgage Lender in the Selling Process
Your reverse mortgage lender plays a crucial role, acting as a partner in the sale. They are not an obstacle, but rather a necessary point of contact to ensure the loan is properly closed out. The lender will provide an essential document called a “payoff statement.” This statement details the exact amount needed to satisfy the reverse mortgage loan as of a specific date.
This figure is critical for determining the net proceeds from your sale and is usually paid directly from the closing proceeds.
Typical Timeline for Selling a Home with an Existing Reverse Mortgage
The timeline for selling a home with a reverse mortgage is often similar to selling any other home, with a few additional steps. The process generally involves:
- Initial Decision and Preparation: Deciding to sell and preparing your home for the market.
- Listing and Showing: Working with a real estate agent to list and show your property.
- Offer and Acceptance: Receiving and accepting an offer from a buyer.
- Obtaining Payoff Statement: Requesting the payoff statement from your reverse mortgage lender. This usually takes a few business days to a week.
- Closing: The final step where ownership transfers and the reverse mortgage is paid off from the sale proceeds.
While standard sales can close in 30-60 days, the inclusion of obtaining the payoff statement and ensuring its accuracy might add a few extra days to the closing process.
Initial Steps for Homeowners Considering Selling
When you begin to think about selling your home with a reverse mortgage, the very first and most important step is to contact your reverse mortgage lender. They are your primary resource and can provide a clear understanding of the current loan balance and the process for obtaining the payoff statement. It’s also wise to consult with a real estate agent who has experience with reverse mortgages.
They can help you understand the market value of your home and how the sale proceeds will be distributed after the mortgage is settled.
“Open communication with your reverse mortgage lender is the cornerstone of a successful home sale.”
Selling your house with a reverse mortgage is definitely possible, and it gets kinda tricky if you’re wondering if can a joint mortgage be transferred to one person , because that’s a whole different ballgame with loans. But yeah, you can totally sell your house with a reverse mortgage, it just means paying off what’s owed.
Financial Implications and Payouts When Selling
Selling a home with a reverse mortgage can feel like navigating a new financial landscape, but understanding how the proceeds are distributed can bring clarity and peace of mind. When the home is sold, the funds generated are carefully allocated to ensure all obligations are met, and any remaining equity is returned to you or your heirs.The process of selling a home with a reverse mortgage involves several steps to settle the loan and distribute the sale proceeds.
It’s a structured approach designed to be fair to all parties involved, from the borrower to the lender and any potential heirs.
Distribution of Sale Proceeds
When a home secured by a reverse mortgage is sold, the proceeds from the sale are distributed in a specific order of priority. This ensures that the reverse mortgage lender is repaid first, followed by any other outstanding obligations, and then the remaining funds go to the homeowner or their estate.The typical order of distribution is as follows:
- First, the outstanding balance of the reverse mortgage loan, including accrued interest and any fees, is paid off.
- Next, any outstanding property taxes, homeowners insurance premiums, or other required property charges that have not been paid by the borrower are settled.
- Finally, any remaining funds after these obligations are met are distributed to the homeowner or their heirs.
Parties Receiving Funds from the Sale
Several parties may receive funds when a home with a reverse mortgage is sold. The primary recipients are the reverse mortgage lender and, if there’s any remaining equity, the homeowner or their heirs. In some cases, other entities might also receive a portion of the proceeds.The main parties involved in the payout are:
- The Reverse Mortgage Lender: This is the entity that provided the reverse mortgage loan. They are repaid the full outstanding loan balance.
- The Homeowner or Heirs: If the sale price exceeds the total amount owed on the reverse mortgage, the remaining equity belongs to the homeowner or their heirs.
- Third-Party Service Providers: These could include real estate agents, closing attorneys, title companies, and any other professionals involved in the sale transaction. Their fees are typically paid from the sale proceeds.
- Property Tax Authorities or Insurance Companies: If there were any outstanding property taxes or insurance premiums due, these entities would be paid.
Costs Associated with Selling a Home with a Reverse Mortgage, Can you sell your house with a reverse mortgage
Selling a home always comes with costs, and when a reverse mortgage is involved, there are specific expenses related to settling the loan. Understanding these costs upfront is crucial for planning and budgeting.The potential costs associated with selling a home with a reverse mortgage include:
- Reverse Mortgage Payoff: This is the most significant cost, comprising the principal borrowed, accrued interest, mortgage insurance premiums (if applicable), and servicing fees.
- Real Estate Agent Commissions: Standard fees paid to the real estate agents involved in the sale.
- Closing Costs: These include title insurance, escrow fees, recording fees, and attorney fees.
- Property Taxes and Homeowners Insurance: Any prorated taxes or premiums due up to the closing date.
- Repairs and Staging: Costs incurred to prepare the home for sale and make it more attractive to buyers.
- Transfer Taxes: State and local taxes levied on the transfer of property ownership.
A key aspect to remember is that with most reverse mortgages, including the FHA-insured Home Equity Conversion Mortgage (HECM), the borrower or their heirs will never owe more than the value of the home at the time of sale, even if the loan balance has grown larger than the home’s worth. This is due to the non-recourse feature of these loans.
Selling a Home with Equity vs. Owing More Than the Home’s Value
The financial outcome of selling a home with a reverse mortgage depends significantly on whether the sale price is more or less than the total amount owed on the loan. These two scenarios have distinct implications for the homeowner or their heirs.When selling a home with a reverse mortgage:
- Scenario 1: Selling a Home with Equity
If the sale price of the home is greater than the total amount owed on the reverse mortgage, the difference is the remaining equity. This equity is then distributed to the homeowner or their heirs after all selling costs and the loan payoff are accounted for. For example, if the home sells for $400,000 and the reverse mortgage balance is $250,000, there is $150,000 in potential equity to be distributed, minus selling expenses. - Scenario 2: Owing More Than the Home’s Value
In the case where the sale price is less than the total amount owed on the reverse mortgage, the non-recourse feature of most reverse mortgages, particularly HECM loans, protects the borrower and their heirs. The lender will accept the sale proceeds as full satisfaction of the debt. The FHA insurance fund covers any shortfall for HECM loans. Therefore, the heirs would not be responsible for paying the difference out of their own pockets.For instance, if the home sells for $200,000, but the reverse mortgage balance is $275,000, the lender accepts the $200,000, and the heirs are not required to pay the remaining $75,000.
The Process of Selling
Selling a home with a reverse mortgage might seem daunting, but with a clear understanding of the steps involved, it can be a manageable and even smooth process. It’s about navigating the system with knowledge and patience, ensuring your needs are met while fulfilling your obligations.This section will guide you through the essential stages of selling your home when you have a reverse mortgage.
We’ll break down the journey into manageable steps, highlighting key interactions and the documentation you’ll need.
Initiating the Sale
The first step in selling your home with a reverse mortgage is to officially inform your mortgage servicer of your intention to sell. This communication is crucial as it sets the wheels in motion for the sale and ensures all parties are aware of the transaction. It’s important to do this early in the process to avoid any potential delays or misunderstandings.You will need to formally notify your reverse mortgage servicer in writing.
This notification should include your intent to sell the property and the estimated timeline for the sale. Your servicer will then provide you with specific instructions and documentation requirements tailored to your loan.
Communication Flow During the Sale
A clear and consistent flow of communication is vital for a successful sale. This involves coordinating between you, your real estate agent, and your reverse mortgage servicer. Each party plays a distinct role in ensuring the transaction proceeds efficiently and compliantly.The typical communication loop looks like this:
- Homeowner to Real Estate Agent: You’ll engage a real estate agent to list and market your home. You’ll provide them with information about the property and your plans to sell.
- Real Estate Agent to Reverse Mortgage Servicer: Once an offer is accepted, your agent will typically communicate with the servicer to obtain necessary information, such as the payoff amount and any specific closing requirements.
- Reverse Mortgage Servicer to Homeowner and Real Estate Agent: The servicer will provide the official loan payoff statement, which is essential for closing. They will also confirm any specific procedures that need to be followed.
- Homeowner to Reverse Mortgage Servicer: You will work with the servicer to ensure all loan obligations are met, especially regarding the final payoff.
Documentation Required from the Reverse Mortgage Holder
During the sale process, you will need to provide certain documentation to your reverse mortgage servicer and potentially to the title company or closing agent. This documentation helps them verify your identity, confirm your ownership, and process the loan payoff accurately.Key documents typically include:
- A copy of the signed purchase agreement.
- Proof of your identity.
- Any other documents requested by the servicer to facilitate the loan payoff and sale.
It is advisable to keep copies of all documents submitted and received for your records.
Critical Tasks for a Smooth Transaction
To ensure a smooth and successful sale of your home with a reverse mortgage, consider this checklist of critical tasks. Completing these steps diligently will help prevent common pitfalls and lead to a more positive experience.
- Notify Your Reverse Mortgage Servicer: As soon as you decide to sell, send a written notification to your servicer.
- Obtain a Payoff Statement: Request a formal payoff statement from your servicer. This statement details the exact amount needed to satisfy the loan, including any accrued interest and fees.
- Engage a Real Estate Agent: Choose an agent experienced with reverse mortgage sales. They can help navigate the complexities.
- List and Market Your Home: Work with your agent to price and market your home effectively.
- Review Offers Carefully: Understand the terms of any offers received, especially regarding closing dates and contingencies.
- Coordinate with the Closing Agent: Ensure the closing agent (title company or attorney) has all the necessary information from your servicer to facilitate the payoff at closing.
- Understand Your Proceeds: Be clear on how the sale proceeds will be disbursed, especially after the reverse mortgage is paid off.
- Finalize the Sale: Attend the closing and sign all necessary documents to complete the sale.
A clear understanding of these steps and proactive communication will pave the way for a successful home sale.
Addressing Potential Challenges and Scenarios: Can You Sell Your House With A Reverse Mortgage
Selling a home with a reverse mortgage can be a smooth process, but it’s wise to be prepared for the occasional bump in the road. Understanding these potential challenges beforehand can make a significant difference in how you navigate them, ensuring a more peaceful transition for everyone involved.Navigating these situations with knowledge and the right support can transform potential stress into a manageable experience, allowing you to move forward with confidence.
Sale Price Insufficient to Cover Loan Balance
It’s a scenario that can cause worry, but there are clear pathways to follow if the home’s sale price doesn’t quite cover what’s owed on the reverse mortgage. The key here is understanding the “non-recourse” nature of most reverse mortgages, which protects homeowners and their heirs.In most cases, if the sale price is less than the outstanding loan balance, including accrued interest and fees, neither the homeowner nor their heirs will owe the difference.
The lender is generally responsible for absorbing this shortfall. However, it’s crucial to confirm the specific terms of your particular reverse mortgage agreement, as variations can exist.
| Scenario | Outcome |
|---|---|
| Sale Price > Loan Balance | The remaining equity goes to the homeowner or their heirs. |
| Sale Price < Loan Balance | Lender absorbs the difference (non-recourse feature). Heirs are typically not responsible for the shortfall. |
Implications for Heirs Upon Homeowner’s Passing
When a homeowner with a reverse mortgage passes away, their heirs typically have a few options regarding the home and the reverse mortgage. The most common scenario involves selling the home. The heirs are usually notified of the loan balance and have a set period, often six months with a possible extension, to decide their course of action.If the heirs choose to sell the home, the proceeds from the sale are first used to pay off the reverse mortgage balance.
Any remaining equity after the loan is repaid belongs to the heirs. If the sale price is insufficient to cover the loan balance, as mentioned earlier, the heirs generally do not have to pay the difference due to the non-recourse clause.
If the heirs wish to keep the home, they can do so by paying off the reverse mortgage balance, which is typically the lesser of 95% of the appraised value or 95% of the loan balance. This allows them to retain ownership without needing to sell.
Resources for Homeowners Facing Difficulties
When challenges arise during the sale of a home with a reverse mortgage, it’s important to know that help is available. Several organizations and resources are designed to guide homeowners through complex situations and provide necessary support.
- HUD-Approved Housing Counselors: These counselors offer free or low-cost advice on reverse mortgages, including the sale process. They can explain your options, review documents, and help you understand your rights and responsibilities.
- Reverse Mortgage Lender: Your lender is a primary resource. They can explain the specifics of your loan, provide payoff statements, and guide you through the selling procedures specific to their product.
- Real Estate Agents experienced with Reverse Mortgages: Seek out agents who have prior experience selling homes with reverse mortgages. They will be more familiar with the unique requirements and timelines involved.
- Legal Counsel: For complex situations or if you have significant concerns about the loan terms or sale process, consulting with an attorney specializing in elder law or real estate can provide valuable guidance and protection.
These resources are invaluable in ensuring that you and your loved ones are well-informed and supported throughout the entire selling process, especially when facing unexpected hurdles.
Legal and Regulatory Considerations
Navigating the sale of a home with a reverse mortgage involves a framework of laws and regulations designed to protect all parties involved, especially the homeowner. Understanding these legal guardrails ensures a smooth and compliant transaction, offering peace of mind as you move forward. These regulations are in place to ensure fairness and transparency throughout the selling process.
Governing Legal Requirements for Home Sales with Reverse Mortgages
The sale of a home encumbered by a reverse mortgage is subject to federal and state laws, as well as specific program rules. These legal requirements ensure that the borrower’s rights are upheld and that the lender’s interests are properly addressed. The primary goal is to facilitate a clear transfer of ownership while satisfying the outstanding loan balance.
Protections for Reverse Mortgage Borrowers During Sale
Reverse mortgage borrowers are afforded significant protections during the sale of their home. These safeguards are embedded within the program’s regulations to prevent exploitation and ensure that borrowers receive the equity remaining after the loan is repaid. It’s crucial to be aware of these rights to leverage them effectively.Here are some key protections:
- The borrower is not personally liable for any shortfall if the sale proceeds are less than the outstanding loan balance, provided all loan terms were met.
- Borrowers have the right to sell their home at any time, regardless of their occupancy status, as long as the sale is conducted in accordance with the loan terms.
- Any remaining equity after the sale, once the loan is repaid, belongs to the borrower or their heirs.
- Specific disclosure requirements ensure borrowers understand the financial implications of the sale, including the exact amount owed and any potential remaining equity.
Home Equity Conversion Mortgage (HECM) Program Sales Rules
The HECM program, the most common type of reverse mortgage, has specific rules governing the sale of a property. These rules are designed to be straightforward and protect both the borrower and the federal government, which insures HECM loans. Adhering to these guidelines is essential for a successful sale.Key HECM sales rules include:
- The sale must satisfy the HECM loan balance in full. This includes the principal borrowed, accrued interest, mortgage insurance premiums, and servicing fees.
- If the sale price is insufficient to cover the full loan balance, the FHA insurance covers the difference, protecting the borrower from owing more than the home’s value.
- Heirs have the option to pay 95% of the appraised value of the home or the outstanding loan balance, whichever is less, to keep the property, rather than selling it.
- A Notice of Default and Foreclosure Sale must be sent if the borrower fails to meet loan obligations, but a sale can often prevent foreclosure.
Comparing Selling Processes for Different Reverse Mortgage Types
While the HECM program is prevalent, other proprietary reverse mortgage products exist. These may have slightly different selling procedures and contractual obligations, though the fundamental principle of satisfying the loan balance remains consistent. It is vital to consult the specific loan documents for any non-HECM reverse mortgage.Here’s a general comparison:
- HECM: Federally insured, standardized rules, strong borrower protections, and clear procedures for sales and heir buyouts.
- Proprietary Reverse Mortgages: These are offered by private lenders and are not insured by the FHA. Their terms, including sale requirements and payout structures, can vary significantly. It’s crucial to review the specific loan agreement for details on selling a home with a proprietary reverse mortgage. The protections may be different, and the loan servicing company will guide the sale process based on their contract.
Working with Real Estate Professionals
Selling a home with a reverse mortgage involves unique steps and requires an agent who understands this specific market. Choosing the right real estate professional can make a significant difference in a smooth and successful transaction, ensuring all parties are informed and that the sale proceeds efficiently.Selecting a real estate agent experienced with reverse mortgage sales is crucial. These agents are familiar with the specific documentation, timelines, and potential complexities that can arise when a property is sold with an outstanding reverse mortgage.
They can navigate these nuances effectively, saving you time and potential headaches.
Selecting an Experienced Real Estate Agent
Finding an agent with a proven track record in reverse mortgage sales is paramount. Look for professionals who have actively marketed and sold properties with existing reverse mortgages. Their experience will translate into a better understanding of the process, including how to handle the payoff of the loan and any remaining equity.
Communication Protocols with the Reverse Mortgage Servicer
Clear and consistent communication between your real estate agent and the reverse mortgage servicer is vital. The agent needs to understand who to contact at the servicer, what information they require, and the typical response times. This ensures that the loan payoff is calculated accurately and that the sale can close on schedule.Best practices for communication include:
- The agent should be provided with the loan number and contact information for the reverse mortgage servicer early in the process.
- Regular updates should be shared between the agent and the homeowner regarding showings, offers, and any escrow or closing progress.
- The agent should proactively communicate with the servicer about the expected closing date to facilitate the timely preparation of the payoff statement.
- Any specific requirements from the servicer regarding property condition or repairs should be relayed to the homeowner by the agent.
Best Practices for Listing a Home with a Reverse Mortgage
When listing a home with a reverse mortgage, it’s important to present the property in its best light while being transparent about the situation. An experienced agent will know how to market the home effectively to attract qualified buyers.Consider these best practices:
- Ensure the property is in good condition and staged attractively to appeal to potential buyers.
- The listing agent should be prepared to explain the general nature of a reverse mortgage to interested parties, focusing on how the sale will proceed to satisfy the loan.
- Transparency about the reverse mortgage is key; however, the agent should manage the disclosure of specific loan details to avoid confusion or deterring buyers.
- The agent should work with the servicer to understand the estimated payoff amount, which can be useful information for buyers considering an offer.
Questions for a Potential Real Estate Agent
To ensure you are working with the right professional, ask potential real estate agents specific questions about their experience with reverse mortgage sales. This will help you gauge their understanding and ability to handle your unique situation.Here is a set of questions to ask:
- What is your experience with selling homes that have an active reverse mortgage?
- How many homes with reverse mortgages have you successfully closed in the past year?
- What is your process for communicating with reverse mortgage servicers?
- How do you typically handle the payoff of a reverse mortgage at closing?
- Can you provide references from past clients who have sold homes with reverse mortgages?
- What is your marketing strategy for a property with a reverse mortgage?
- How do you ensure buyers understand the transaction process when a reverse mortgage is involved?
Illustrative Scenarios and Outcomes
Understanding how a reverse mortgage sale plays out in real life can bring clarity to this often complex topic. By examining different situations, we can better grasp the financial realities and the steps involved. These examples aim to demystify the process and offer a comforting perspective on potential outcomes.
We will explore several hypothetical and case study scenarios to illustrate the diverse ways a home sale can unfold when a reverse mortgage is in place. These examples cover situations with positive equity, situations where the loan balance is higher than the home’s value, the involvement of heirs, and the unique circumstances of selling while still residing in the home.
Home Sale with Positive Equity
Imagine Eleanor, a spry 82-year-old, who decided to downsize and move closer to her grandchildren. She had a reverse mortgage on her beloved home, which had a remaining loan balance of $150,000. The home’s current market value was assessed at $400,000. Eleanor worked with a real estate agent who helped her list and sell the home for $390,000.
- Upon the sale, the reverse mortgage lender was paid the full $150,000 owed.
- The remaining equity, $390,000 (sale price)
-$150,000 (loan balance) = $240,000, was distributed to Eleanor. - This significant sum provided her with substantial funds to purchase a smaller, more manageable home and enjoy her retirement with greater financial freedom.
Home Sale When Loan Balance Exceeds Home Value
Consider the case of Robert, who unfortunately passed away before selling his home. His reverse mortgage had a balance of $300,000, but due to a downturn in the local housing market, his home was only appraised at $250,000. Because reverse mortgages are non-recourse loans, his heirs were not responsible for the $50,000 difference.
- The heirs listed the home and it sold for its appraised value of $250,000.
- This amount was paid directly to the reverse mortgage lender, satisfying the loan balance as much as possible.
- Since the loan balance exceeded the sale price, the lender absorbed the $50,000 deficit. The heirs received no funds from the sale, but they were also free from any further obligation.
Heirs Involved in the Selling Process
When a homeowner with a reverse mortgage passes away, their heirs often become involved in managing the estate, including the sale of the home. Let’s look at the situation of the Miller family. Their parents had a reverse mortgage on their home with a balance of $180,000. The home was valued at $350,000.
- The heirs, after consulting with the reverse mortgage servicer and a real estate agent, decided to sell the home.
- The home was listed and sold for $340,000.
- The heirs ensured that the reverse mortgage was paid off from the sale proceeds ($180,000).
- The remaining equity, $340,000 – $180,000 = $160,000, became part of the deceased parents’ estate and was distributed according to their will. The heirs successfully navigated the process, respecting their parents’ financial arrangements and securing the remaining assets.
Homeowner Sells While Still Living in It
It’s possible for a homeowner to sell their home with a reverse mortgage while continuing to live there for a period. For example, Martha, aged 78, decided to sell her home but wanted to stay in it for another six months until her new, smaller apartment was ready. Her reverse mortgage balance was $100,000, and the home was worth $300,000.
- Martha found a buyer willing to purchase the home with a delayed closing or a rent-back agreement.
- The sale was finalized, and the $100,000 reverse mortgage was paid off.
- Martha received the remaining equity of $200,000 upfront.
- She then entered into a lease agreement with the new owner, paying rent to continue living in her former home for the agreed-upon six months. This allowed her to secure her funds and transition smoothly to her new living situation without immediate disruption.
Epilogue
So there you have it! Selling a home with a reverse mortgage isn’t the mythical beast it’s often made out to be. We’ve dissected the financial ins and outs, laid out the step-by-step process, and even peeked behind the curtain at potential hiccups. Remember, with the right knowledge and a good team, you can navigate this journey with confidence. It’s all about understanding the game, playing it smart, and ultimately, reaching that satisfying finish line.
Now go forth and conquer!
Key Questions Answered
Can I sell my house if the reverse mortgage balance is more than the home is worth?
Absolutely! In most cases, if the sale proceeds aren’t enough to cover the loan balance, the lender typically absorbs the difference. This is often referred to as non-recourse protection, meaning you or your heirs won’t owe the shortfall. It’s a key feature designed to protect borrowers.
What happens to the reverse mortgage if I sell my home and move into an assisted living facility?
If you sell your home to fund your move, the reverse mortgage loan becomes due and payable. You’ll use the proceeds from the sale to pay off the loan balance. If you were to move into an assisted living facility but keep the home, you might be able to defer the loan repayment as long as you meet certain occupancy requirements and continue to pay property taxes and homeowners insurance.
Do I need to tell my reverse mortgage lender I’m selling my house?
Yes, you absolutely must inform your reverse mortgage servicer as soon as you decide to sell. They will provide you with a payoff statement, which is crucial for the closing process. They are partners in this, not adversaries, and will guide you on the specific procedures.
Can my heirs sell the house with a reverse mortgage after I pass away?
Yes, your heirs have several options, including selling the home. They will need to notify the reverse mortgage servicer. They can sell the home for its market value, and the proceeds will be used to pay off the reverse mortgage. If the sale price is less than the loan balance, they generally won’t owe the difference due to the non-recourse nature of most reverse mortgages.
What if I want to sell my house but still live in it for a while?
This is where a “sale-leaseback” arrangement might come into play, though it’s not directly part of the reverse mortgage process itself. You would sell the home to a buyer and then lease it back from them. However, your reverse mortgage loan would still become due and payable upon the sale unless specific conditions are met, like if you’re selling to a qualified family member under certain rules.
