If you currently have a reverse mortgage and want to sell your home, it’s important to know what to expect. If you’re set to inherit a home that has a reverse mortgage, plan for the home to go through probate, which means you may need to contact a probate attorney for guidance. Read on for what to know about selling houses with reverse mortgages.
Selling a House If You Have a Reverse Mortgage
There are no specific fees or penalties for selling your house if you have a reverse mortgage. However, you will need to pay off the loan balance on the home, along with interest. There are other key differences when selling a house with a reverse mortgage in place.
If your home has appreciated in the time since you obtained your reverse mortgage, you will get to keep the extra money, after satisfying your outstanding loan. Unfortunately, if your home has depreciated, you can wind up owing more than the home is worth. But you’ll never have to pay off more than your loan balance. As of this writing, it is unlikely your Oregon home has depreciated. In the first quarter of 2022, home prices in Oregon had risen more than 10% in a single year.
Your heirs or beneficiaries may also have to sell your home to pay off the reverse mortgage if the home is worth less than you owe. They will not have to pay off more than the home is worth.
Step-By-Step Guide to Selling a Home that Has a Reverse Mortgage
Selling homes with reverse mortgages is similar in many ways to selling any other home. You should take the following four steps.
- Contact Your Mortgage Servicer or Lender
The first thing you’ll want to do is to confirm the loan balance on your reverse mortgage. So you’ll contact your lender or the mortgage broker who helped you obtain the reverse mortgage. It’s a smart move to ask for the full payoff price in writing.
- Contact a REALTOR®
You’ll need a real estate agent to help list and market the home. You may choose to use the same agent who helped you buy the home. You may ask friends or family for a referral. Your mortgage broker can also likely refer you to a REALTOR® who is experienced in selling homes with reverse mortgages.
- Review Your Offers
One of the rewards of working with a real estate agent is that they will help you review your offers. In a super competitive market, you are likely to get multiple offers, and perhaps some offers that exceed the list price. A real estate agent can help you sort through the best offers. They can also quickly identify potential buyers who have their financing in place so that the sale is more likely to be successful.
- Pay off Your Reverse Mortgage Loan
Once you’ve sold the home, you’ll need to pay off the balance. You’ll receive any funds beyond the payoff amount.
Learn More About Reverse Mortgages in Oregon
Oregonians over the age of 62 who would like to tap into the equity they’ve accrued in their home, may be eligible for a reverse mortgage. A reverse mortgage provides cash in the form of monthly payments, lump sums, or as a line of credit. If you take out a reverse mortgage, you will no longer have a mortgage loan. Instead, the loan balance will need to be paid once you pass away, move out of the home, or sell the home. The loan balance will never exceed the value of the home. To learn more about reverse mortgages in Oregon, contact Strategic Mortgage Solutions to speak with an experienced mortgage advisor today. Feel free to send us a message or call 541-275-1148.