A reverse mortgage will help a elderly homeowner pay bills or make repairs. A reverse mortgage is a loan taken out against a home’s equity, or part of the home’s value free of additional liens. Reverse mortgages are available only to borrowers ages 62 and older. Unlike conventional mortgages, where a large sum is provided to the borrower at once and repaid over time, reverse mortgages possess the lender paying the borrower a predetermined amount every month until the loan sum is reached.
Estimate how much you really owe. The pay structure of a reverse mortgage ensures that you owe no more than what you’ve received on the loan to date, and interest and other fees the lender may charge.
Assess your loan documents. Verify the interest and additional fees your lender charges monthly. Start looking for any fees that can be charged if you pay off the loan until the entire amount was paid to you.
Weigh your projected debt against the home’s value. Compare the amount owed on the reverse mortgage into your home’s current worth. You might not have the ability to sell the home if you owe close to what the home is worth and do not have the financial assets to cover the expenses associated with selling the home.
Obtain a payoff estimate from the lender if you’re able to sell. A payoff estimate is the approximate amount of money required to cover your loan in full. Contact your lender’s customer support department and possess the quotation sent to your home.
Find a realtor. You do not have to use a real estate agent to sell your home, but a broker can help you with the sales process. Realtors are paid by commission, so a proportion of their sales price of your home, such as 6 per cent, will visit the agent. Ask the broker about fees.
List your home for sale. You’ll have to advertise the home yourself if you do not use a broker.
Find a property lawyer. Some places require lawyers in real estate transactions that have mortgage loans. Look at using a real estate lawyer even if you are not required to do so, as the full payment of your reverse mortgage has to be dealt with properly to prevent problems in the future.
Find a buyer. The buyer will need financing or the full purchase price in cash in order that you sell your home, as the reverse mortgage lender has to be paid in full at the time of their sale.
Close to the deal. Your reverse mortgage will be paid in full from the proceeds of your home’s sale. Any money left over will be yoursminus the amount of any additional loans or liens on your house and the fees associated with your sale.