Can You Sell a House With a Reverse Mortgage in California?

You can turn to a reverse mortgage if you’re over 62 and need cash. A reverse mortgage provides cash from your home’s equity and doesn’t require monthly payments.

But what if you decide you want to move? Can you sell a house with a reverse mortgage in California? 

Yes. You can sell a house, but you’ll need to learn a few things first. 

Continue reading this guide as we discuss selling a house with a reverse mortgage.

can i sell my house with a reverse mortgage

Basics of Reverse Mortgages

A reverse mortgage is unique in one primary way. You do not repay it through monthly payments. 

Instead, it’s a loan you only repay if one of these apply:

  • You die
  • Sell the house

Reverse loans are only available to older individuals. The primary purpose of a reverse loan is to give a person some cash without inheriting a monthly debt.

You may turn to one if you live on a fixed income and need supplemental income. Acquiring cash from your home’s equity provides a solution to this problem.

It’s also beneficial because you do not repay the money. Reverse loan lenders do not expect the money back until you sell the home. 

How to Sell a House With a Reverse Mortgage in California

The good news is that you can sell a house with a reverse mortgage. You can sell your house anytime. This includes your personal residence or an inherited home with a reverse mortgage.

You must begin by proving ownership if you inherit a home with a reverse mortgage. You can do this through an affidavit of heirship. You’ll already have proof of ownership if the home is your primary residence.

In either case, you may want to begin by evaluating the home’s value. You can look at a recent appraisal or estimated value to see how much it’s worth. Next, look at the reverse loan balance.

Comparing these amounts helps you determine the approximate equity in the house. You must repay the loan balance when selling a house with a reverse mortgage.

reverse loan is a lien. Liens provide legal rights to lenders. Homeowners must satisfy these liens when selling their homes.

The next step is finding a buyer. Unfortunately, many homeowners wait for weeks or months to find a buyer. Once you find one, you’ll spend time negotiating the details.

The buyer may ask you to repair parts of the home. They may ask you to pay for some of their closing costs. You’ll also pay for some closing costs, including the realtor’s commission. 

Then, of course, you’ll have to wait for the buyer and their lender to complete all the necessary steps. After finding a buyer, you’ll likely close the deal approximately five or six weeks later. 

how to sell a house with a reverse mortgage

Considerations for a Reverse Mortgage Home Sale

Before selling a home with a reverse mortgage balance, it’s helpful to consider a few implications. Here are several:

Equity and Profit

As mentioned, you must consider the home equity and profitability of the house. Look at the home’s current value, then consider all the costs you must pay.

First, you must repay the reverse mortgage balance. Next, you may have to pay for repairs, commissions, and inspections. 

After subtracting these costs, you’ll see the amount you’ll receive from the home sale. There is a cost of selling a house through a traditional sale, often more than you might expect. 

Home Condition and Contingencies

The second consideration is the home’s condition. A traditional buyer might not take the house as-is. Instead, they’ll insert contingencies into the purchase offer.

Contingencies require you to do something. In many cases, they require repairs, which cost money. These repairs affect your bottom line. 

Unpermitted Work

Also, consider if the home has unpermitted work. Unpermitted work refers to projects completed on the house without the proper work permits. 

Selling a house with unpermitted work can lead to roadblocks. Unfortunately, you may be responsible for paying the costs of fixing the issues. 

Options for Selling With a Reverse Mortgage

As described already, you can sell the house through a traditional sale. This process involves hiring a real estate agent to assist. However, there is a simpler option: Sell to a cash buyer.

Cash home buyers in California purchase all types of homes. They pay cash for the properties and can buy houses with reverse mortgages. 

This method is the best option if you want to sell a home fast in California. Here are some reasons people choose this method:

No Extra Costs

While you must repay your liens, which include a reverse mortgage, you won’t pay for anything else. You’ll receive a check for the difference between the offer amount and your loan balance amount.

There are no additional costs involved with a home sale to a cash buyer. 

No Work Required

Secondly, the buyer won’t give you a list of things to do to the property. They’ll take the house in its current state, problems and all. This leads to ease in selling a property that needs work or with unpermitted work. 

It's Fast

Additionally, this method offers a fast sale. Cash buyers don’t need mortgage lenders. Therefore, they won’t require an appraisal, inspections, or title insurance. 

The result is a fast sale. In many cases, you’ll close the transaction within a few weeks of requesting an offer from a cash buyer.

cash buyer for a reverse mortgage house

Learn More About Selling to Cash Home Buyers

You can sell a house with a reverse mortgage in California. The first method is through a traditional sale. However, this method takes time and can be costly.

A simpler option is to sell it to a cash home buyer in California. As you can see, selling to a cash home buyer negates many steps.

As a result, cash home sales are often the best solution to selling a home with a reverse mortgage. 

Premier Property Buyers makes the process simple. We offer no-obligation consultations, providing a hassle-free approach to selling a home with a reverse mortgage.

Reach out today to learn more about the process.