A mortgage loan with no early repayment fees is known as a reverse mortgage. Therefore, the answer is that, just like a conventional mortgage, a borrower can sell a home at any time with a reverse mortgage. The lender will close the borrower’s account after the borrower pays off the remaining balance of the reverse mortgage loan when they sell their house. Borrowers then keep the remaining equity.
Steps for selling a house with a reverse mortgage
There are a few differences between selling a home using a reverse mortgage and selling a home generally. Here is an example of what the procedure might entail:
A borrower will be equipped with the knowledge to sell their reverse mortgaged home in a similar way to how they would have done with any other home with a mortgage once they are aware of the few differences to take into account.
Do I have to notify my lender that I am selling the home?
One wise move would be to confirm the property’s payoff in writing in accordance with the formal payoff quote, which specifies the approximate sum of money required to fully repay your reverse mortgage loan and close your account.
What happens to the money once I sell my home that has a reverse mortgage?
When you sell your house, all of the proceeds will first be used to pay off the balance of your reverse mortgage. Any money left over after paying off any liens on your house and any fees related to the sale will be yours to keep.
Are there any penalties if I sell my home with a reverse mortgage?
Selling the house and paying off your reverse mortgage loan comes with no penalties.
Sources
Assad, Anna. The SFGate article “How Can You Sell Your House After a Reverse Mortgage” com. NP. ND. Web. 22 December 2015. http://homeguides. sfgate. com/can-sell-house-after-doing-reverse-mortgage-3220. html.
A mortgage loan with no early repayment fees is known as a reverse mortgage. Therefore, the answer is that, just like a conventional mortgage, a borrower can sell a home at any time with a reverse mortgage. The lender will close the borrower’s account after the borrower pays off the remaining balance of the reverse mortgage loan when they sell their house. Borrowers then keep the remaining equity.
One wise move would be to confirm the property’s payoff in writing in accordance with the formal payoff quote, which specifies the approximate sum of money required to fully repay your reverse mortgage loan and close your account.
When you sell your house, all of the proceeds will first be used to pay off the balance of your reverse mortgage. Any money left over after paying off any liens on your house and any fees related to the sale will be yours to keep.
Selling the house and paying off your reverse mortgage loan comes with no penalties.
FAQ
Can you sell your house when you have a reverse mortgage?
You will be required to repay the money you borrowed plus interest and fees if you choose to sell your home while you have a reverse mortgage loan. You keep the difference if your loan balance is less than what your house sells for.
How long do you have to sell a house with a reverse mortgage?
You may, however, have up to six months to repay the reverse mortgage loan, depending on the lender and the loan’s terms. Kennedy explains that “the estate has six months to sell the property, with two optional three-month extensions.”
Do I have to pay capital gains if I sell while having a reverse mortgage?
If I sell while I have a reverse mortgage, do I have to pay capital gains taxes? You’ll only have to pay capital gains taxes on a reverse mortgage sale if you make at least $250,000 if you’re single (or $500,000 if you’re married) in profit.
Can heirs walk away from reverse mortgage?
Contrary to popular belief, the house does not revert to the bank upon the passing of the last borrower. Your heirs will have the choice of paying off the loan balance and keeping the house, selling the house and keeping the profit, or simply walking away and letting the lender sell the house.