How To Sell A Home That Has A Reverse Mortgage Personal finance

Once your home is sold, the proceeds are used to pay off your loan balance and any outstanding fees. Typically, you are required to pay off your reverse mortgage immediately after you sell the house.

However, depending on your contract, you may have six months from the date of sale to pay off your loan, plus up to two three-month extensions. Once all the privileges and fees are paid, the remaining funds are yours.

Avoid These Mistakes When Selling a Home With a Reverse Mortgage

While you are free to sell your home whenever you want, it is not always a good idea when a reverse mortgage is involved. You want to be strategic about the sale whenever possible.

Here are some mistakes to avoid:

Sell ​​too early. Interest, closing costs, and other charges can dramatically reduce your equity. If you sell your home a few years after getting a reverse mortgage, you probably won’t have time to build up enough equity to enjoy a profit after the loan is paid off.

Sell ​​when the value of your home has fallen. You won’t have to worry about telling the difference if your home is selling for less than you owe. On the flip side, selling when you’re “underwater” on your loan (you owe more than the home’s value) ensures that you won’t walk away with nothing after the sale.

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