How to Sell a Reversed Mortgaged Home
Know when you need to sell your reverse mortgaged home., Check your mortgage for a non-recourse clause., Know when you should sell a reverse mortgaged home., Contact your lender.
Step-by-Step Guide
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Step 1: Know when you need to sell your reverse mortgaged home.
There are several situations in which selling a reverse mortgaged home is nearly inevitable.
For instance, if you live alone, live with your spouse or partner, or if you’re the last surviving borrower named on the mortgage, the loan must be paid off.
The easiest way to obtain the money necessary to pay off the mortgage is by selling the house.Moving out of the home is defined as leaving the home for 12 months or more.
Always check the terms of your specific mortgage to determine conditions for property sale or loan repayment. -
Step 2: Check your mortgage for a non-recourse clause.
A non-recourse clause means that when you sell the reverse mortgaged home, you will not pay more than what the home is worth.
For instance, if your reverse mortgaged home is worth $20,000 but the mortgage totals $30,000 including interest, you will pay just $20,000.Most reverse mortgages are backed by the federal government and therefore have non-recourse clauses., If you have inherited a reverse mortgaged home, keep the home if the remaining loan balance is less than the value of the house.
For instance, if the mortgage is $50,000 and the home is worth $70,000, you could reap $20,000 from sale of the home.
But if the home is worth $20,000 but the mortgage balance is $50,000, you’d have to sell the home for $20,000 and end up with nothing.
To avoid this, you can simply turn the property over to the lender.
This practice is known as “deed in lieu of foreclosure.”To turn the property over to the lender, let them know you have no interest in selling the home and express your interest in letting the lender retake the home.
They will guide you through the next steps. , Let your lender know that you intend to sell your home.
Your lender will confirm how much you owe on the mortgage, including money you received, interest charged, and relevant fees.
Ask your lender if there are additional fees that need to be paid before the sale goes through.
Obtain an itemized, written statement detailing the full payoff amount. -
Step 3: Know when you should sell a reverse mortgaged home.
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Step 4: Contact your lender.
Detailed Guide
There are several situations in which selling a reverse mortgaged home is nearly inevitable.
For instance, if you live alone, live with your spouse or partner, or if you’re the last surviving borrower named on the mortgage, the loan must be paid off.
The easiest way to obtain the money necessary to pay off the mortgage is by selling the house.Moving out of the home is defined as leaving the home for 12 months or more.
Always check the terms of your specific mortgage to determine conditions for property sale or loan repayment.
A non-recourse clause means that when you sell the reverse mortgaged home, you will not pay more than what the home is worth.
For instance, if your reverse mortgaged home is worth $20,000 but the mortgage totals $30,000 including interest, you will pay just $20,000.Most reverse mortgages are backed by the federal government and therefore have non-recourse clauses., If you have inherited a reverse mortgaged home, keep the home if the remaining loan balance is less than the value of the house.
For instance, if the mortgage is $50,000 and the home is worth $70,000, you could reap $20,000 from sale of the home.
But if the home is worth $20,000 but the mortgage balance is $50,000, you’d have to sell the home for $20,000 and end up with nothing.
To avoid this, you can simply turn the property over to the lender.
This practice is known as “deed in lieu of foreclosure.”To turn the property over to the lender, let them know you have no interest in selling the home and express your interest in letting the lender retake the home.
They will guide you through the next steps. , Let your lender know that you intend to sell your home.
Your lender will confirm how much you owe on the mortgage, including money you received, interest charged, and relevant fees.
Ask your lender if there are additional fees that need to be paid before the sale goes through.
Obtain an itemized, written statement detailing the full payoff amount.
About the Author
Charles Mitchell
Creates helpful guides on lifestyle to inspire and educate readers.
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