Selling your home if you have a Reverse Mortgage on it is as simple as selling it any other time. You have a mortgage that will be paid off with the proceeds of the sale. The great news is, if you somehow owe more than your home is worth, your Real Estate Agent only needs to sell it for current Market Value. You are not responsible for paying any deficiency balance. This is because of the FHA Mortgage Insurance that is included in the Reverse Mortgage.
However, if your home sells for more than the balance owed on your Reverse Mortgage, that money is yours to keep. Make sure your Real Estate Agent has a good understanding of the basics of a Reverse Mortgage. That will help you get the best outcome of the sale.
If you are the child or heir of the property and the borrower(s) passed away, you will have up to a year and sometimes longer to sell the property without any loan payments due. Keep in mind that until the property sells, interest will continue to accrue on the loan monthly.
Can I Use a Reverse Mortgage to Make My Home Marketable?
Absolutely. I have helped a lot of Seniors use some of the equity in their home to bring their homes up to date, do some repairs, get a new roof, new paint, you name it. Often times seniors find that they no longer need a big house since the kids have moved out and they would like to downsize. Sometimes, since you may have lived in your home for many years, it may be in need of some upgrades or repairs, and the Reverse Mortgage can be used to provide the funds to do these repairs so you can then sell and buy a smaller home. Your Real Estate agent should understand how to make this work for you and put you in touch with a reliable Reverse Mortgage Professional to find out what your needs are.
Curbside appeal is one of the most important factors in selling your home. Making your home look current and well kept will help get a better sales price. Once you sell the home, the balance of your Reverse Mortgage will be paid off, and the remaining equity will go directly to you to use towards your new home, or whatever you have it slated for.
Given that Reverse Mortgages are intended mainly for folks that want to stay in their homes long term, there are some situations that meet the exception.
If you have any questions on the Reverse Mortgage or want to learn more ways it can be used to buy a new home or upgrade your current home, give me a call at (714) 455-9150 or leave a comment below.