So, you are interested in a reverse mortgage product. One of the most commonly asked questions is about restrictions on selling a home that has a reverse mortgage attached to it. Further questions ask whether the value of a home will decrease as a result of a reverse mortgage product, and if the home will in fact sell for less than the amount owed on the loan. Read this article to find out more about selling your home while you have a reverse mortgage.

Since reverse mortgage owners are never forced to move or sell their home, why would a home with this product be sold? There are only two situations that would involve a home with a reverse mortgage product being sold: either the final surviving borrower passes away or decides to move out of the home. At this point, they may have either chosen not to make any monthly payments, or pay off their interest.

Surprisingly, there are little to no limits attached to selling your home if you have a reverse mortgage. While there are penalties in place for breaking mortgage contracts, reverse mortgage products have safety nets in place for certain situations. If the borrower must move into a retirement home, HomeEquity Bank automatically reduces the early payment penalty by 50%. If the home is being sold due to the death of the borrower, the remaining beneficiaries pay no penalty. At the time of sale, the remaining owed funds must be paid to the bank. Here there is another safety net in place: if the home sells for less than the amount owing, the bank will never take more than the value of the home. So essentially, selling or buying a home with a reverse mortgage is almost the same process as selling or buying a home with a regular mortgage product, just with a few extra perks.

When it is time to pay out a reverse mortgage, the process is very similar to regular mortgage procedures. Lawyers are typically involved to oversee the transfer of funds and the returning of any remaining balance to the client. This process is only different if the home sells for less than the amount owing, which was mentioned earlier. Although this is an extremely rare case, it is nice to know there are guarantees in place to protect both you and your family from unmanageable costs.

Now that you know a bit more about selling your home with a reverse mortgage in place, you can feel confident going into the process. Questions? Contact me today and we would be happy to help with your reverse mortgage in Brampton.