In this era of economic turbulence, when there is a slump in the property market, use of reverse mortgage has gradually risen into prominence. According to (HUD) the U.S. Department of Housing and Urban Development, a reverse mortgage is nothing but a home loan that enables the home owner to cash a part of the equity in his house. If you have done a reverse mortgage, with the hope of saving more and now planning to sell your house just to take advantage of the topsy-turvy housing industry, them you have come to the right place. This article can tell you about the essential steps that you must follow while selling your house after a reverse mortgage. Remember, with the precarious condition of real estate market, selling a home which have already amassed reverse mortgage is not at all easy than selling a home with no mortgage.
Reverse mortgage As the definition suggests, reverse mortgage refers to the loan, which is secured against the equity of the homeowner. As per the lending policies a reverse mortgage could be transformed as monthly payments, lump sums, a credit line, or some mixture. Everyone doesn’t qualify for a reverse mortgage. As long as you are at least 62 years old and own a home with sufficient equity, you can take out a reverse mortgage loan against your home's equity. However, remember, before selling the home with a reverse mortgage on it, you have do way with all the obligations incurred on the property first.
How to sell your home with reverse mortgage
• First and foremost, assess exactly how much you owe on your reverse mortgage. Take into account the initial amount received, the Interest and other fees and figure out the total amount owed. Check out if any extra fees will be added to your debt, if you pay the loan off before you receives the entire amount.
• Next, contact the lenders of reverse mortgage and let them know that you are planning to sell the home.
• In the mean time, compare the amount you owe on the reverse mortgage and the home's current value. In case you find out the loan amount and the present home values is more or less same and you lack sufficient financial resources to cover the costs related to selling the home, discard the plan of selling your home for the time being.
• However, if you can afford to sell the house, acquire a payoff quote from your lenders which is the approximate amount of money required to pay back the loan in full.
• Now decide to terminate your reverse mortgage agreement as per the reverse mortgage contract. You will be required to pay a nominal fee for doing so. You can pay back the reverse mortgage at that very moment or can delay it till your home sale completes.
• Advertise your home for sale. You can appoint a real estate agent for this task as well.
• As soon as you find a potential buyer, who is offering you a price that equals the value of your home, accept his offer. Remember, the amount offered must cover your reverse mortgage debts including as well as the interest.
• Finally, close the deal. Pay the reverse mortgage in full from the proceeds of your home's sale.
Follow the aforementioned points and sell your house after a reverse mortgage successfully.