Selling Your House? Don't Get Reverse Mortgaged Out of the Picture!
So, you've unlocked the magic of senior living with a reverse mortgage – living large, courtesy of your own home equity. But what if the siren song of a retirement condo in Florida (shuffleboard not included) tickles your fancy? Can you sell your house and still enjoy those sweet, sweet reverse mortgage benefits?
Hold onto your dentures, folks, because the answer is yes! But just like that time Uncle Fred accidentally used hairspray instead of denture adhesive (hilarious!), there are a few things to keep in mind.
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| How To Sell A House With Reverse Mortgage |
Step 1: Befriend Your Reverse Mortgage Lender (They're Not the Enemy, Promise!)
Think of your reverse mortgage lender as a helpful travel companion on your downsizing adventure. They'll hold the map (or more accurately, the payoff quote) and guide you through the process. Get in touch and let them know you're thinking of selling. They'll provide a detailed breakdown of what you owe, including that accrued interest that's been growing like a Chia Pet on sunshine.
Tip: Take mental snapshots of important details.
Remember: This isn't a pop quiz. There's no penalty for selling with a reverse mortgage.
Step 2: The Price is Right (Hopefully)
Traditionally, selling a house involves hoping for a bidding war that would make your grandchildren faint. But with a reverse mortgage, things get a tad trickier. The longer you live it up with those reverse mortgage funds, the higher your loan balance. This means you need to sell for at least what you owe, plus any closing costs.
Tip: Use this post as a starting point for exploration.
Think of it like this: The sale of your house is a grand retirement potluck. Your reverse mortgage lender gets the main course (the loan balance), you get the leftover macaroni salad (any remaining equity), and everyone else gets a slice of humble pie (closing costs).
Pro Tip: Consider getting your house appraised before you put it on the market. This will give you a realistic idea of what price point will cover your reverse mortgage and leave you with some spending money for those aforementioned retirement adventures.
Tip: Context builds as you keep reading.
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Step 3: Selling Sunset (or Sunrise, Depending on Where You're Moving)
Now that you know the financial nitty-gritty, it's time to unleash your inner Joanna Gaines and get your house ready to sell. Spruce it up, stage it to perfection, and price it competitively. Remember, buyers these days are like picky poodles – they want move-in ready and all the bells and whistles.
Don't forget to disclose your reverse mortgage to potential buyers. Transparency is key, and a good real estate agent can help navigate those conversations.
QuickTip: Break down long paragraphs into main ideas.
The Big Payoff (Literally)
Once you've found a buyer and closed the deal, the proceeds go towards paying off your reverse mortgage. Any leftover money is yours to keep – like finding a twenty in your winter coat pocket!
Here's the cherry on top: Depending on your specific reverse mortgage plan, you might have a few months to settle the loan before it becomes due. Use this time wisely – maybe for a luxurious pre-retirement cruise or a victory lap around the neighborhood in a golf cart.
So there you have it, folks! Selling a house with a reverse mortgage is totally doable. Just remember to plan ahead, be upfront with your lender and realtor, and get ready for a new chapter in your life. After all, retirement should be a time for relaxation, not reverse mortgage-related relaxation.
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