Imagine spending decades building a comfortable home, raising a family and creating countless memories. Many retirees’ homes represent their most significant asset and often hold a special place in their hearts. As one ages, the expenses of maintaining a home can become overwhelming, especially for those living on a fixed income.

We will discuss how you can sell a house with a reverse mortgage and explore the steps involved in selling a home with a reverse mortgage. 

Even if you are a retiree considering a reverse mortgage or a real estate agent working with seniors, this blog will provide valuable insights and practical advice. 

Can You Sell a House with a Reverse Mortgage?

Are you a homeowner who has taken out a reverse mortgage and is now considering selling your property? If so, you may be wondering if it’s even possible to sell a house with a reverse mortgage. The answer is YES !, but the process can be complex and requires a thorough understanding of the reverse mortgage payoff process.

One of the main requirements of a reverse mortgage is that it must be paid off before the property can be sold. If the reverse mortgage balance exceeds the home’s sale price, the seller must make up the difference out of pocket. Understanding this before putting your home on the market is crucial to avoid any surprises during the sale process.

While selling a house with a reverse mortgage can be challenging, it’s not impossible. With the right approach and the help of a knowledgeable professional, you can successfully navigate this complex process and move on to the next chapter of your life.

How to Sell a House With a Reverse Mortgage?

Selling a house with a reverse mortgage can be a complex process, but by working with your lender and a knowledgeable real estate agent, you can successfully navigate the process and move on to the next chapter of your life. 

1. Contact Your Lender 

The first step in selling a home with a reverse mortgage is to contact your lender. You must inform them of your plans to sell and request a payoff statement. This statement will outline the total amount owed on the reverse mortgage, including any interest, fees, and charges. 

It’s essential to obtain this information upfront to understand how much you need to pay off the reverse mortgage when selling the home. The lender will send an appraiser to determine the property’s value. 

2. Determine Your Home’s Value 

You will need to have your home appraised to determine your home’s current value. This appraisal helps you to set a fair market price and understand how much equity you have in your property.

3. List and Sell the Home

You can list your home for sale if you clearly understand your payoff amount. Be sure to work with a real estate agent with experience selling homes with reverse mortgages, or you can sell it to a direct home-buying company. It is important to consult with the lender and a real estate professional to ensure that you understand the implications of selling to a home-buying company and make informed decisions.

They can help you navigate the unique challenges of this process, including disclosing the reverse mortgage to potential buyers and ensuring a smooth closing. It’s also important to price your home competitively to attract buyers and ensure a successful sale.

4. Close and Transfer the Funds

If you have found a buyer and agreed on a sale price, you can proceed with closing the sale. During the closing, the proceeds from the sale will be used to pay off your reverse mortgage. If the sale price is less than the payoff amount, you’ll need to make up the difference out of pocket. The reverse mortgage is paid off, any remaining funds will be transferred to you.


How Long Do You Have to Sell a House with a Reverse Mortgage?

There is no specific timeframe for selling a house with a reverse mortgage. As long as the borrower is alive and occupies the home, they can keep the reverse mortgage until the end of the loan term.

Can Borrowers Lose their Homes with a Reverse Mortgage?

Yes, borrowers can lose their homes if they fail to meet the loan’s obligations, such as paying property taxes and insurance or maintaining the property. 

Are There Penalties if I Sell a Home With a Reverse Mortgage?

You retain title to the house and are free to sell it at any time for any reason. There are no penalties if you sell the house, but you must have to repay the loan at the time of the sale. 

How Much Does the Mortgage Insurance Cost?

The cost of mortgage insurance, also known as private mortgage insurance (PMI), can vary depending on the lender and the loan amount. 

Final Thoughts

At last, selling a house with a reverse mortgage requires careful planning and attention to detail, but with the right mindset and approach, it can be a successful and profitable transaction. Selling a house with a reverse mortgage can be a viable option for borrowers needing home equity.

Understanding the obligations and potential risks associated with a reverse mortgage is essential to make informed decisions. Furthermore, being versatile in your approach to selling the house can significantly benefit you in finding the right buyer and getting the best possible price for your property. 

Adjust your marketing strategy and be open to different types of buyers, such as Real Estate Investors or cash buyers or home-buying company. With careful planning and execution, selling a house with a reverse mortgage can provide financial flexibility and peace of mind!

SHOBHIT SETH. “12 Steps of a Real Estate Closing” Investopedia, 09 December 2021,


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