If you decide to sell your home while you have a reverse mortgage loan, you'll need to repay the money you borrowed plus interest and fees. If your loan balance is less than the amount you sell your home for, you keep the difference. The 22 states where you must hire a real estate attorney to sell your home are Alabama, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and West Virginia. Most reverse mortgages have a no-recourse clause, meaning that you or your estate cannot owe more than the value of the home when the loan expires and the home sells.
Once your home sells, the profits are distributed at closing, including the amount needed to pay the reverse mortgage. There are certain guidelines that must be followed both during the life of the loan and if you later decide that you want to sell your home. However, paying a reverse mortgage can be complicated, so asking a real estate attorney to review the documentation might be a good idea. You must repay your reverse mortgage loan when you sell the home, after which your lender will close the account.
You may be able to use the proceeds from the sale of your home to pay your reverse mortgage if you have a large balance that you can't pay with cash. When you have a reverse mortgage, you keep the title to the property and can sell it any time you see fit. But what happens if you decide to sell a home with a reverse mortgage? If you are a homeowner with a reverse mortgage, are helping a family member sell with a reverse mortgage, or have inherited a home with a reverse mortgage, here's what you need to know. Once you sell your home, the proceeds from the sale will first go to repaying the full balance of your reverse mortgage.
When you are approved for a reverse mortgage, your lender gives you an advance on the equity of your home as a lump sum, line of credit, or regular monthly payments. While the process is pretty much the same, there are some key differences when it comes to selling a home with a reverse mortgage. Tell your agent as soon as possible that you have a reverse mortgage so they can help you through the process. After you pay any mortgage or lien on your home, you can keep the remaining income from the sale.
And if you're managing a reverse mortgage sale of an inherited home, it can help to have an attorney guide you through the process. Self-employed reverse mortgages (also known as jumbo) usually don't require mortgage insurance, but they tend to have higher interest rates and fewer consumer protections.