Selling a house with an Atlanta reverse mortgage
What is a reverse mortgage?
A reverse mortgage is a type of home equity loan designed for seniors aged 62 and older. The homeowner borrows against the equity in their home; instead of the homeowner paying the bank a monthly mortgage payment, the bank pays the homeowner, either in a lump sum or through monthly installments. This provides the homeowner with a source of income to meet living expenses during retirement while allowing them to retain ownership of the property.
The loan typically becomes due when the homeowner passes away, leaves the home, or decides to sell the property. However, if the homeowner falls behind on property charges such as property taxes or homeowner’s insurance, or if the house falls into disrepair, then the lender may file a notice of default and send the house into foreclosure if the loan balance is not paid.
Can you sell a house with a reverse mortgage in Atlanta, GA?
You may be asking yourself, “Can you sell a house with a reverse mortgage?” The answer is yes, you can! However, when you decide to sell the property, the reverse mortgage loan must be paid back. These reverse mortgage costs include repayment of the loan balance, plus any accrued interest and fees. If the sale price is higher than the loan balance, you get to keep the difference. But if the sale price is less than what you owe, it can be a little more complicated.
Home Equity Conversion Mortgages (HECMs) are the most common type of reverse mortgages. These are insured by the Federal Housing Administration (FHA) and are non-recourse loans, meaning that you aren’t required to pay back more than 95% of the appraised value of the house—for example, if you owe $85,000 and your house is only valued at $80,000, you can sell it for $76,000 (95% of the value), and the remaining $9,000 will be paid by mortgage insurance. But if your Atlanta reverse mortgage is a different type that isn’t FHA-insured, you may be required to pay back the difference if you sell the house for less than the loan amount.
Reasons you may be selling a home with a reverse mortgage
There are several scenarios that will cause a reverse mortgage loan to become immediately due and payable. In these situations, selling the house may be the best method of paying back the loan.
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Foreclosure. Your house may enter foreclosure for reasons such as lapsed property tax payments, failure to pay homeowner’s insurance costs, or the house having fallen into a state of disrepair. If this happens, you will be required to pay back the reverse mortgage loan.
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Moving. If the house is no longer your primary residence because you are moving to a retirement community, care home, relative’s house, or other location, the reverse mortgage loan will need to be repaid even if you still own the home.
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Inherited property. If you inherit a house with a reverse mortgage, the lender will send you a notice that the loan is due. You’ll have 30 days to take action, although you may be granted an extension of up to 6 months in order to sell the house or secure financing to purchase it yourself.
Selling to a cash home buyer like HomeVestors® can possibly help you avoid foreclosure, settle your accounts, and move on to the next stage of your life with a clean slate.
HomeVestors® can help you avoid reverse mortgage costs and foreclosure.
Selling a home with a reverse mortgage can be a complex process, and you may face time constraints and financial burdens when it comes time to pay back the loan. In such cases, selling to a cash home buyer can be an attractive option. Cash home buyers are real estate investors who purchase properties directly from homeowners for cash. HomeVestors® is America’s #1 cash home buyer and offers several advantages to homeowners who need to sell a house in Atlanta with a reverse mortgage:
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Quick and convenient sale. We can close the sale in as little as three weeks, offering a quick and hassle-free process that can help you pay back the loan by the 30-day deadline. If you need more time or receive an extension beyond that 30-day window, we can work with you to sell at a later date, too.
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No repairs required. We purchase properties of all kinds “as is,” eliminating the need for costly repairs or renovations. You don’t need to paint, fix, or even clean anything before you go—we’ll take care of it.
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Avoid foreclosure. If you’re facing a potential foreclosure due to default on your Atlanta reverse mortgage, selling to HomeVestors can possibly help you avoid this situation. We’ll be there for you throughout the process, explain every step in detail, and help you start the next chapter of your life free of the burden of your house.
Selling a home with a reverse mortgage is possible but requires careful planning and communication with the lender. Understanding the loan balance and the implications of the sale is essential. If you’ve been wondering “Can you sell a house with a reverse mortgage?” and are seeking a quick and straightforward selling process, contact HomeVestors to schedule your free, no-obligation consultation.