Selling a house is a big undertaking. It requires a lot of planning and patience, but for those that need it, it is well worth it in order to find a more appropriate home. For those who already have a reverse mortgage on their home, selling is quite a bit more complicated. In today’s blog, Family Home Loan Texas discusses what to expect when selling a home with a reverse mortgage.
What Is A Reverse Mortgage?
Before discussing how having one affects selling your home, it is important to understand the basics. At its core, it is a loan that allows you to leverage the equity you have built up in your home to receive a mortgage. As its name suggests, this loan works as the opposite of a mortgage; instead of making monthly payments to your lender, the lender pays you. In order to qualify for one, you must be at least 62 years old and you need to have at least 50% equity in your home.
What To Expect When Selling
A major benefit of a reverse mortgage, in addition to receiving money from a lender, is that that the money you owe back is not due until you no longer live in your house. However, when you sell, you will have to pay it back along with the feels and all the interest you have accrued. With this in mind, when you sell your home, there are two routes that can occur. If your home has appreciated in value, you will keep any money that is left over after selling and paying back what you owe to your lender.
If your home’s value has declined, you may owe more than what your home is worth. If it sells for its appraised value, your lender will receive the full amount from the sale and your mortgage insurance will make up the rest. In most cases, you will never have to pay back more than what the home is worth, even if you owe more than that.
Where This Leaves You
This all makes selling your home more complicated. After all, if your goal is to buy a new home, selling won’t leave you with too much money left over once you pay back your lender. Because of this, you need to have a good grasp on all of your finances to understand what you can afford once you leave your house. No two situations are alike, so you have to proceed with what works best for your needs.
Contact Us To Learn More About Reverse Mortgages
We are here to help you through every step of the reverse mortgage process — selling included. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about a reverse mortgage loan.