Selling a Home with a Reverse Mortgage in Missouri
How do you sell a home with a reverse mortgage in the St. Louis, MO, area? First, we need to understand what a reverse mortgage is. Essentially, it’s a home loan that allows homeowners (typically over a certain age) to convert portions of home equity into cash without having to sell or make monthly payments. Instead of making these payments, the lender makes payments to the borrower. Mortgages can be complicated. Luckily, Evervest Home Buyers is here to help homeowners negotiate loans and figure out the best way to maintain a property. We can also help you outright by buying your home. Contact our specialists today to learn more about selling properties that have a reverse mortgage.
What Are Reverse Mortgages?
Reverse mortgages are an option for elderly homeowners that need access to additional cash. These are often used to supplement retirement, cover medical expenses, or make improvements if they’re wanting to sell in the near future. There are considerable costs and financial risks to getting a reverse mortgage that, for example, may affect inheritance. Each situation is unique and it’s important to talk to an expert before jumping into any financial agreement concerning your property.
In Missouri (and most other states), there are a few requirements to apply for a reverse mortgage. See below for more information:
- Homeowners need to be 62 years or older and already have a substantial amount of equity in their home. This could be decades of consistent mortgage payments to borrow back from.
- A homeowner may or may not have to have a mortgage paid off. This is where you need to consult an expert to see if it’s worth investing more equity into your home or not.
- In Missouri, an approved lender can issue a Home Equity Conversion Mortgage (HECM) if you qualify.
- There are multiple ways you can receive payments on a reverse mortgage. For disbursement, borrowers can get a lump sum payout, monthly payments, a line of credit, or any combination depending on the situation.
- Unless you paid off the mortgage and continued putting equity into the property, people with reverse mortgages will have to repay the disbursement. This happens when a loan becomes past due, the homeowner sells, or the homeowner passes away.
- In Missouri, borrowers (or their family and heirs) don’t have to pay back more than the home’s value. Reverse mortgages are considered non-recourse loans.
- A homeowner will also have to be HUD-approved by a housing counselor. Reverse mortgages can be complicated — this is to ensure borrowers don’t make rash decisions.
It’s important for homeowners to carefully consider the implications of borrowing against their home’s equity. This becomes even more complicated if you’re looking to sell your home. Learn more about selling a property with a reverse mortgage below.
How to Sell a Property with a Reverse Mortgage
Selling a home with a reverse mortgage doesn’t have to be overly complicated. As long as you meet the aforementioned requirements, any buyer can buy against the balance of the reverse mortgage or come to a compromise. Learn more about selling your St. Louis, MO, home for cash in our FAQs. Below, we’ll discuss a couple of steps a seller must take in order to make a smooth sale.
- You’ll need to notify your lender if you want to sell a home with a reverse mortgage. They will likely provide you with more information about the process and verify any outstanding loan balance.
- Homeowners will also want to get their home appraised. Any equity you’ve put into your home may change the asking amount. You’ll also want to consider the current real estate market which, as we all know, fluctuates all of the time.
- You’ll also want to consider any accrued interest rates and fees when it comes to understanding your loan balance. Your lender can help you evaluate the equity of the property (i.e. the difference between the sale price and the loan balance).
- The loan balance (if any) and the appraisal will help you determine the selling price. This is extremely important when you negotiate with a cash for home buyer.
- You may want to hire a real estate agent if you choose not to use a cash for home buyer. They can help you market the home and negotiate. Or, if it’s offloading an unwanted property, you can list it yourself or directly contact a cash for home buyer.
- Homeowners will want to disclose the fact that you have a reverse mortgage to any buyer. This may increase or decrease the value of your home. If you followed the above steps, this shouldn’t be a problem.
- After the sale is negotiated, the reverse mortgage is usually taken into account and the balance (if any) is subtracted from the sale. The buyer may want to pay off the balance themselves depending on the situation.
The next step, of course, is to transfer ownership. It is important to communicate your intention to sell a property with a reverse mortgage with all appropriate parties. This includes the buyer, the lender, and maybe even a real estate agent. Contact Evervest Home Buyers today to learn more about selling your reverse mortgage or any other property today for more information about our services in the St. Louis, MO, area.
Call Us Now if You Have a Reverse Mortgage and Want to Sell
If you have any more questions about selling a home with a reverse mortgage, don’t hesitate to reach out to Evervest Home Buyers for more information. We will make a transparent offer as fairly and quickly as possible. It’s our goal to help you close fast. You can learn more about our team here. We can help you sell your home fast and easy, and get cash in your pocket.
If you’re interested in selling your house in St. Louis, MO, to Evervest Home Buyers, all you have to do is call our team now for a free, no-obligation offer on your home. You can call us at (314) 730-0366 or contact us online to learn more about selling your reverse mortgage property.
