Taking out a reverse mortgage gives senior homeowners a source of income that doesn’t require them to dip into their savings. Although this is ideal for those who want to remain in their homes for the long term, if they decide to move, they may wonder whether selling a house with a reverse mortgage is possible.
The short answer is yes. Alan with Pyramid Properties LLC in Memphis, TN, explains that it takes just a few extra steps to ensure the process goes smoothly.
How Selling a House With a Reverse Mortgage Works
A reverse mortgage isn’t like a traditional home loan. Instead of you making monthly payments to the lender, the lender pays you. The amount of the loan depends on how much home equity you have.
Over time, those payments and interest accumulate, increasing the loan balance. If and when you sell the house, you’ll need to pay off that balance first to transfer the property to the new owner. Once the mortgage payoff is complete, any extra profit is yours to keep.
Making the Process Simpler
So, how can you sell a house with a reverse mortgage without excessive stress or complications?
Know Your Numbers
Before listing your home, find out exactly how much you owe.
Your lender can provide a mortgage payoff statement showing the current loan balance, interest, and outstanding fees. Compare that to the property value to calculate the remaining equity. If your home is worth more than the payoff amount, you could walk away with cash in your pocket.
Work With the Right Real Estate Agent
A real estate agent experienced in selling a house with a reverse mortgage can help you set a competitive price, market it effectively, and guide you through the paperwork maze. They can also help you navigate mortgage lender requirements, as they often have additional steps or deadlines you’ll need to meet.
Factor in Closing Costs
Just like any other home sale, selling a house with a reverse mortgage will incur closing costs. These costs include agent commissions, title fees, and transfer taxes. Keep this in mind when calculating your net profit.
What If Your Home Value Isn’t Enough?
Reverse mortgages do have a safety net for owners insofar as they are “non-recourse” loans. That means if your property value has dropped and your home sells for less than the loan balance, you’re not personally liable for the difference. The lender takes the loss, not you.
Explore Alternatives With Alan From Pyramid Properties
If you’ve explored your options and decided on selling a house with a reverse mortgage, you can make the process simple. The key is understanding how the loan works, knowing your numbers, and having the right people on your team.
Homebuyers like Alan at Pyramid Properties in Memphis, TN, and homeowners across Memphis navigate situations such as selling without insurance or with a reverse mortgage. He makes fair cash offers on houses, regardless of condition, and completes transactions quickly without additional fees or costs. To learn more and discuss your options with Alan, please call 901-504-5555 or request a quote online.