In the early 1960’s a new type of mortgage loan was designed specifically for senior homeowners who wished to access the equity in their home while aging in place.  This new loan became popular because it fulfilled a need that many borrowers had.  Senior homeowners wanted to stay living in their homes for the rest of their lives, and reverse mortgage loans were the perfect solution to help them do just that.

However, unexpectedly at times, some borrowers found that they needed to move away for one reason or another.  There were borrowers who needed to move into a nursing home for full-time care.  Others found it was best to live in their children’s home, or another geographical location.  Whatever the case may be, borrowers found that they had some questions about selling a home with a reverse mortgage.

Can you sell a house with a reverse mortgage?

A reverse mortgage is a mortgage loan that can be repaid at any time without penalty.  Therefore, the answer is yes: a borrower can sell a home with a reverse mortgage at any time they choose, just like a traditional mortgage.  When a borrower sells their home, they must repay the reverse mortgage loan balance and their lender will close their account.  Borrowers then keep the remaining equity.

Steps for selling a house with a reverse mortgage

The process of selling a home with a reverse mortgage is similar to selling a home in general, with a few differences.  Here is a typical breakdown of what the process may entail:

  • Contact your reverse mortgage lender and confirm how much you owe on your loan, which would include any money you have received to date, the interest charged, and any other lender fees. Verify if there are any additional fees.  Obtain the full payoff quote in writing.
  • You can find a real estate agent to help you with the sales process, although this is not required.
  • List your home for sale.
  • You could choose to utilize the services of a real estate attorney in order to ensure that the full payment of your reverse mortgage is handled correctly.
  • Once your home is sold, ensure that the reverse mortgage loan is paid in full from proceeds and that your reverse mortgage account is closed. You may keep the remaining amount.

Once a borrower is aware of the few differences to take into account, they will be armed with the knowledge to sell their reverse mortgaged home in a similar manner as they would have done with any other home with a mortgage.

Do I have to notify my lender that I am selling the home?

One smart step is to confirm the home’s payoff in writing per the formal payoff quote, which is the approximate amount of money that is necessary in order to repay your reverse mortgage loan in full and close your account.

What happens to the money once I sell my home that has a reverse mortgage?

Once you sell your home, the proceeds from the sale will first go to repaying your reverse mortgage balance in full. Once all liens on your home and any fees associated with your sale are paid off, any remaining proceeds after that will be yours to keep.

Are there any penalties if I sell my home with a reverse mortgage?

There are no penalties to sell the home and repay your reverse mortgage loan.


Assad, Anna.  “How Can You Sell Your House After Doing a Reverse Mortgage?”  NP.  ND.  Web.  22 December 2015.