Some homeowners believe that having a reverse mortgage ties them to their home indefinitely. However, that’s not the case. Even if you’re receiving funds from a lender instead of making monthly payments, you’re still the legal owner of your property. This means you can decide to sell your home whenever the need arises.
Whether you’re thinking about downsizing, planning for medical care, or simply moving to a new location, it’s helpful to understand how selling works when a reverse mortgage is in place. While the process isn’t overly complicated, it does require specific steps and attention to timing.
Let’s break it down so you feel confident and ready.
Can You Sell a House with a Reverse Mortgage?
Yes, you can. As long as your name is on the title, selling is entirely up to you. While the reverse mortgage in Charleston SC must be repaid upon sale, that doesn’t stop you from listing the property. The lender cannot block the sale, but they do have to be notified.
Also, the type of reverse mortgage you hold—whether it’s a government-backed loan or a private one—doesn’t change the core requirement. You’ll need to repay the balance when the home sells, and the lender holds a lien on the property until then.
Selling a Home with a Reverse Mortgage: Understanding the Lien
When you take out a reverse mortgage, a lien is placed on the home. This lien ensures the lender is repaid when the home is sold. It’s a legal claim tied to the property—not the homeowner personally.
To sell the home, the lien must be satisfied. This usually happens through proceeds from the sale. After the loan is paid off, any remaining equity is yours to keep. However, if the home sells for less than what’s owed, most reverse mortgage agreements are non-recourse. That means the lender cannot ask you or your estate for the remaining balance.
What Happens If the Home Has Gained or Lost Value?
One important factor in selling a home with a reverse mortgage is its current market value. If your property has appreciated, things are fairly straightforward. After the loan balance is paid, any extra funds belong to you.
For example, if your home is worth $400,000 and you owe $250,000 on the reverse mortgage, you could walk away with the difference (minus closing costs and fees). This scenario benefits homeowners who’ve built equity while receiving reverse mortgage funds.
On the other hand, some homes may not increase in value. In fact, they may depreciate or sell for less than the loan balance. This is known as being “underwater.” Fortunately, with most reverse mortgages, you won’t be responsible for the shortfall. Mortgage insurance often covers the difference, and the sale clears the debt completely.
Steps to Follow When Selling a Home with a Reverse Mortgage
To make the sale smooth, it helps to plan ahead. There are a few things you’ll want to take care of before putting your home on the market.
• Let the Lender Know Early
Inform your lender about your intent to sell. They’ll provide a payoff amount and guide you on any timelines or obligations. This keeps things transparent and prevents delays.
• Maintain the Property
Continue paying property taxes, insurance, and any HOA dues while your home is on the market. If these lapse, foreclosure could happen before you sell.
• Work with an Experienced Agent
While any real estate agent can list a home, one familiar with reverse mortgage sales will better understand how to manage timing, documents, and disclosures.
• Get a Home Appraisal
This helps you price the property accurately. It also helps you and the lender understand if the home’s value covers the loan balance.
• Organize Documents in Advance
Gather mortgage paperwork, tax records, and home improvement receipts. This makes the closing process smoother and speeds up lender coordination.
Common Mistakes to Avoid During the Sale
Even though selling is allowed, there are still some common pitfalls to watch for.
• Waiting Too Long to Notify the Lender
The lender needs time to prepare a payoff statement. Waiting until the last minute could delay closing or complicate the sale.
• Assuming You Can Walk Away from the Lien
You can’t transfer the property to someone else without paying the loan. The lien follows the home, not the person, so clearing the debt is mandatory.
• Misunderstanding Non-Recourse Terms
While you won’t owe more than the home is worth, selling for a low price can still result in zero equity. Always know what your payoff looks like before listing.
What to Do If Selling Isn’t the Right Move
Sometimes selling doesn’t make sense. For instance, if market conditions are weak or you’re not ready to leave the home, other options exist.
You could consider renting out the property in Charleston SC or refinancing into a traditional loan if your financial picture allows. Alternatively, family members may want to buy the home outright, using their own funds to pay off the reverse mortgage and keep the property in the family.
Each of these options requires careful thought. Still, knowing you have choices can reduce pressure and help you feel more in control.
Wrap-Up: You Can Sell Your Home with a Reverse Mortgage
If you’ve been wondering whether a reverse mortgage means you’re stuck in place, it doesn’t. Selling is possible—and often practical—as long as you follow the necessary steps. Whether your home has gained value or not, the process allows for a clean transition without hidden surprises. So, if life is pointing you in a new direction, take the opportunity to explore your sale options with confidence. Consult South Carolina Reverse Mortgage Services for more details.
Thinking about selling your home with a reverse mortgage? Call South Carolina Reverse Mortgage Services now to get expert help and take the next step.