Whether it’s an inherited property or you’re just looking to downsize or move on, you have your reasons for getting rid of the place. Would selling a house with a reverse mortgage be possible, though?
If you aren’t sure how a reverse mortgage affects your big plans, there’s great news: you can sell with help from cash homebuyers like Wise Property Buyers. Learn more below.
What Is a Reverse Mortgage and How Does It Affect a Home Sale?
In the United States, reverse mortgages allow homeowners aged 62 or older to use part of their home equity for cash without selling the house. Unlike a traditional mortgage, these loans don’t require monthly repayments. Instead, the bank gets its money back when the mortgage holder moves out, sells up, or passes away.
The bottom line for selling a house with a reverse mortgage? When you sell it, the reverse mortgage payoff becomes your first priority. The lender receives the mortgage balance from the sale proceeds, so you’ll get to keep only the remaining equity.
Understanding the Loan Repayment Process Before Selling the Home
Before selling a house with a reverse mortgage, contact your lender for the loan payoff amount that the sale has to cover. This figure includes the principal loan balance, plus any interest and fees. Then, work with a real estate agent or cash homebuyer to estimate an ideal sale price and, hopefully, receive more than what the mortgage lender pockets.
If it sells for less, there’s no need to panic; reverse mortgages are non-recourse. You (or your heirs) won’t owe the lender more than the home is worth.
What About the Heirs To the Property?
Inherited a home that has a reverse mortgage? You can:
- Sell the home to pay off the mortgage loan
- Refinance the mortgage to keep the home yourself
- Allow the lender to sell it and recover their loan amount
Uncooperative heirs and reverse mortgage process challenges can be emotionally taxing, so good communication and professional guidance are key.
A Real Estate Transaction With a Few Extra Steps
At the end of the day, selling a house with a reverse mortgage still qualifies as a regular real estate transaction, only with a few more considerations. For example, make sure to:
- Get the current loan balance
- Work with professionals who understand reverse mortgages
- Plan for any selling costs or repairs if needed
Would you rather avoid showings, listings, or long waits? Selling to a cash buyer would mean zero repairs or upgrades or even having to clean out the property! You can also choose when to close the sale and walk away with a cash payment quickly.
Let Wise Property Buyers Take the House Off Your Hands
If you need help selling a house with a reverse mortgage, Wise Property Buyers has helped a myriad of Detroit homeowners navigate these kinds of reverse mortgage payoff processes and sell on their terms. Whether you’re downsizing from a house that won’t sell, relocating, or managing an estate, contact us today at (313) 513-8824 or reach out online!