How to Sell a Home with a Reverse Mortgage

When you first applied for your reverse mortgage, you were probably trying to plan ahead for your future, with long-term goals in mind. But no matter how much you plan, life can throw you an unexpected curveball, changing things down the road.

Whatever the reason, you may need to sell your home after taking out a reverse mortgage. Selling a home can be tricky under normal circumstances. It can be especially confusing if you have a reverse mortgage.

Thankfully, if you understand how a reverse mortgage works and the general sales process, it can make it much easier to sell your house and avoid many of the pitfall’s homeowners tend to make.

Let’s take a look at the steps involved in selling a home with a reverse mortgage, as well as some tips and tricks to make the sales process less stressful.

Communicate With Your Lender

Everyone knows that communication is key, whether you are years into a marriage or just starting out at a new job. The same holds true in your relationship with your lender.

If you know you want to sell your home, it’s probably a good idea to contact your lender so that you can get accurate numbers to work through right from the get-go.

For example, your lender can give you a formal payoff estimate so you can see exactly how much you owe on your reverse mortgage.

A mistake that many homeowners make is trying to sell their home too soon after taking out their reverse mortgage ¹ . While sometimes it is unavoidable, getting preliminary numbers upfront can help you determine if you have enough equity built up to net a profit after your loan is paid off. In some cases, your lender may even charge a prepayment penalty for paying off your loan too early ¹ .

Reach out to your lender is also beneficial because you can identify if your lender will require an appraisal of your home. In most cases, getting an appraisal is ideal (and required) because you will want to know if your home’s value has decreased at all and, if so, is it beyond what you owe on your home ¹ .

If you are selling your home in response to a maturity event, you usually have 30 days to provide a copy of the report to your lender ¹ .

Hire a Real Estate Attorney

While you are not required to hire a real estate attorney to assist you with your sale in some states, it is required in others ¹ .

Regardless of your state’s requirements, it’s definitely a smart move to get an attorney involved to assist you with navigating the sales process, explain legal provisions and consequences in plain English, and help you to avoid costly errors along the way.

An attorney can also help you stick to a plan for your sale. One of the biggest mistakes homeowners fall into is not actively marketing their home, effectively stalling the sales process ¹ . In certain situations, this can lead to legal consequences or foreclosure.

List Your Property for Sale

It’s important to complete a spot check of your home before you list it for sale to make sure any maintenance issues are remedied, and the home looks presentable before potential buyers see it.

Once you have your home prepped, it’s time to put it on the market and list it for sale. Make sure to utilize professional, high-resolution pictures and a variety of media (including social media, yard sign, 3D tours, etc.) to generate buzz about your property.

You can market your home yourself, but if you want it sold faster and with less headache you may want to invest in the services of a local real estate agent. An agent can also help you set the perfect listing price based on current market trends for your area.

Hiring a real estate agent also shows to your lender that you are actively trying to market and sell your home.

Closing and Settlement

Once you have an accepted offer for your home and everything has been approved, it’s time to seal the deal. Make sure to show up at the closing date on time and sign all the closing documents.

The closing finalizes the sale of your home and will also settle your loan payoff. The proceeds from the sale will be sent from the settlement agent to your lender to pay off your outstanding loan balance and cover any applicable fees.

The difference between the payoff, fees, and payment to other third-parties (such as your attorney fees and realtor commissions) are yours to do with as you see fit.

Things to Avoid in the Sales Process

Ultimately the decision to sell your home resides solely with you. If you do decide to sell your home, there are a few key mishaps you will want to try to avoid at all costs, when going through the sales process.

For starters, selling your home when you owe more than what your property is worth may not be the best solution ¹ . Lenders sometimes refer to this as being “underwater.”

If you proceed to sell your home in this scenario you won’t net anything from the sale because there isn’t even enough equity to cover paying off your outstanding reverse mortgage balance.

A similar scenario could occur if you try selling your property too soon after you take out your reverse mortgage. Not only are you paying the upfront costs and fees associated with getting a reverse mortgage loan, but you may not have enough equity to really receive a profit ¹ .

Both selling early and selling when you are underwater often follow a third common pitfall that homeowners selling a home with a reverse mortgage face: not having a plan. It’s important that you really do your research with the numbers before you embark on the sales process.

Consequently, if you don’t understand the terms of your reverse mortgage or where the sales figures truly lie, your transaction could turn into a financial disaster.

Summary

Contrary to popular belief, you can sell your home after you have taken out a reverse mortgage. However, the trick is to know your numbers before you get too far along in the sales process.

One way to get the upper-hand and ensure a smooth and successful sale is by communicating with your lender upfront your intentions to sell, that way you have all the preliminary numbers and can make an informed decision to proceed or not.

It’s also worth looking into hiring both a real estate attorney and local real estate agent. Both can help you to stick to your sales plan, avoid pitfalls throughout the process, and ensure your final numbers line up so that, in the end, you walk away with more money in your pocket.

Just be wary of selling your property if you are underwater or have recently obtained your reverse mortgage. While selling a home that has a reverse mortgage can seem stressful, that certainly does not have to be your experience.

Sources

1 Bond, C. (2021, May 19). How To Sell A Home That Has A Reverse Mortgage. Retrieved June 29, 2021, from https://www.forbes.com/advisor/mortgages/reverse-mortgage-sale/

The post How to Sell a Home with a Reverse Mortgage appeared first on Fresh Home Loan.

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Garrick Werdmuller

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garrick@freshhomeloan.com

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From Garage to ADU: How a 203(k) Loan Helped One Family Maximize Their Space

By Garrick Werdmuller • June 18, 2025

🛠️ From Garage to ADU: How a 203(k) Loan Helped One Family Maximize Their Space 🛠️ Buy It and Fix It With One Loan: The FHA 203(k) Limited A few years ago, I helped a couple purchase their home with just 5% down. It was a great fit for them at the time — solid neighborhood, the space they needed, and a bonus: a detached garage with potential. Fast forward to today — their teenage son was getting older and needed his own space. Naturally, they started exploring how to turn that detached garage into an Accessory Dwelling Unit (ADU) so he could move in and have a bit more independence. They gave me a call, hoping to tap into their home’s equity with a line of credit. But after running the numbers, it became clear that a traditional HELOC wouldn’t provide enough funds to cover the full conversion. That’s when I brought up a lesser-known option: the FHA 203(k) Limited loan . The FHA 203(k) Limited program snapshot outlines a renovation loan product allowing borrowers to finance both the purchase and rehabilitation of a property with a single mortgage , specifically for non-structural repairs or improvements. Here's a summarized overview for reference or communication: 🏡 What Is It? The FHA 203(k) Limited is designed for: Homebuyers purchasing a fixer-upper Homeowners refinancing and remodeling Primary residences only You can finance both the home and non-structural renovations—like kitchens, bathrooms, floors, HVAC systems, roofs, appliances, and more—with a single mortgage . 💡 Why Use a 203(k) Limited? ✅ Finance up to $75,000 in repairs and upgrades ✅ Only 3.5% down payment ✅ One loan, one closing ✅ No 203(k) Consultant required ✅ Ideal for non-structural repairs and cosmetic improvements ✅ Perfect for first-time buyers and FHA borrowers 🛑 What You Can’t Do With It This is for light remodeling only. You can’t use this loan for: Structural changes or additions Foundation work Landscaping (except for erosion prevention) Pools, hot tubs, or other luxury features (Bummer ! I know! 😒) 🧾 Borrower Submission Checklist Here’s what we’ll need to get started on your FHA 203(k) Limited loan: ✅ Basic Docs Loan Application (apply online or schedule an appointment) Government-issued ID Most recent 30 days of paystubs Last 2 years of W-2s or tax returns (for self-employed borrowers) Most recent 2 months of bank statements ✅ Property & Repair Info Signed Purchase Contract (if purchasing) Contractor’s Written Proposal with: Itemized list of repairs Cost breakdown (labor + materials) Statement that work is non-structural W-9 form from contractor Contractor license & insurance (if required by local jurisdiction) ✅ Appraisal & Renovation Docs Appraisal supporting As-Is and After-Improved Value Permit list (if applicable) Final Work Plan (signed off before close) 💬 Final Thoughts The FHA 203(k) Limited can turn a fixer into your dream home—or give your current space the refresh it deserves. With just one loan , you get flexibility , affordability , and peace of mind . Have a property in mind? Let's talk! 👉 Schedule a Free Consultation https://freshhomeloan.com/schedule-a-meeting/ 🏡 #FHA203k #203KLoan #RenovationLoan #FixerUpper #HomeRemodel #MortgageSolutions #FirstTimeHomeBuyer #HomeLoanHelp #RealEstateTips #MortgageBrokerLife #CaliforniaHomes #BayAreaRealEstate #CentralValleyHomes #DreamHomeGoals

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Guía definitiva de préstamos ITIN – Tu paso hacia la compra de casa

By Smith Chung • June 18, 2025

¿Qué es un préstamo ITIN? Un préstamo ITIN es una hipoteca diseñada para personas que declaran impuestos usando un Número de Identificación de Contribuyente Individual (ITIN) en lugar de un número de Seguro Social (SSN). El ITIN lo otorga el IRS a quienes no son elegibles para un SSN pero aún así deben declarar impuestos en EE. UU. 💬 En resumen: ¿No tienes SSN? ¡No hay problema! Si has sido financieramente responsable y cuentas con documentación básica, ¡podrías calificar! 💪 👨‍👩‍👧‍👦 ¿Quién se beneficia de un préstamo ITIN? Los préstamos ITIN están diseñados para quienes persiguen el sueño americano — incluso sin documentación tradicional. Podrías beneficiarte si: 🌎 Eres inmigrante viviendo en EE. UU. sin green card ni SSN 🧾 Declaras impuestos usando un ITIN 💼 Tienes ingresos estables (W-2, por cuenta propia o incluso en efectivo con comprobantes) 💳 Pagas renta y servicios a tiempo y puedes demostrarlo 💥 Hemos ayudado a familias que pensaban que comprar casa era imposible — ¡y cerraron en solo 30–45 días! 🛠️ ¿Cómo funcionan los préstamos ITIN? Los préstamos ITIN generalmente son financiados por prestamistas no tradicionales (non-QM) o bancos especializados que operan fuera de los lineamientos de Fannie Mae/Freddie Mac. Aquí te explicamos cómo funcionan: 💰 Tipos de préstamo: Tasa fija o ajustable Compra, refinanciamiento o retiro de efectivo Propiedad principal, segunda vivienda y algunas propiedades de inversión 💵 Pago inicial: Generalmente del 10 % al 20 % A menudo se permiten fondos de regalo 📊 Crédito: En algunos casos no se requiere puntaje FICO Se puede usar historial de renta, servicios públicos o incluso crédito internacional 📉 Tasas y plazos: Ligeramente más altas que las convencionales Disponibles con tasa fija a 30 años o ARM de 5/7/10 años 📄 Documentación que necesitarás Para obtener una precalificación, debes demostrar estabilidad, ingresos y solvencia. La mayoría de los prestamistas solicitarán: 🆔 ITIN válido y vigente 📑 2 años de declaraciones de impuestos 💼 Comprobante de ingresos (W-2s, 1099s, o P&L si trabajas por cuenta propia) 🏦 2–3 meses de estados de cuenta bancarios 🌐 Identificación válida (pasaporte, matrícula consular, etc.) 🏘️ Historial de renta (comprobante bancario o carta del arrendador) 💡 Consejo extra: ¡Algunos prestamistas incluso aceptan ingresos o activos del extranjero! 🚫 Conceptos erróneos comunes sobre los préstamos ITIN ❌ Mito 1 : Los préstamos ITIN son ilegales. ✅ Falso. Son 100 % legales y cumplen con las regulaciones federales. ❌ Mito 2 : No calificas si eres trabajador independiente o te pagan en efectivo. ✅ No es cierto. Con declaraciones de impuestos o registros bancarios, definitivamente puedes calificar. ❌ Mito 3 : Te van a estafar o cobrar de más. ✅ ¡No con nosotros! Buscamos la mejor opción para tu préstamo y te explicamos todo con claridad. 🌱 ¿Por qué los préstamos ITIN son importantes para nuestras comunidades? 🏘️ Ser dueño de una casa crea riqueza generacional, estabiliza vecindarios y eleva a las familias. Para muchos inmigrantes, los préstamos ITIN son un puente hacia un futuro mejor — y nos enorgullece ser parte de ese proceso. ❤️ 🧑‍💼 Cómo pueden ayudar los agentes de bienes raíces Agentes inmobiliarios — ¡no dejen pasar esta oportunidad! Los compradores con ITIN son leales, motivados y, en muchos casos, están bien establecidos en sus comunidades. Aquí algunas formas de atenderlos mejor: 🤝 Haz equipo con prestamistas que conozcan las reglas de ITIN • 📆 Establece tiempos y expectativas realistas • 💗 Lidera con empatía y orientación 📣 ¿Quieres destacar? Dirige tu marketing a clientes con ITIN — ¡nosotros te respaldamos! 💼 El enfoque de Fresh Home Loan hacia los préstamos ITIN En Fresh Home Loan Inc., trabajamos con prestamistas confiables para ofrecer soluciones hipotecarias ITIN rápidas, justas y transparentes. Ya sea tu primera casa o una inversión, estamos contigo en cada paso. ✅ 🚀 ¿Listo para comenzar? ¿Conoces a alguien que pueda beneficiarse de un préstamo ITIN? Hagamos realidad el sueño de ser dueño de una casa — de la forma correcta, con apoyo y claridad desde el primer día. 🏠✨ “Llama hoy mismo para empezar tu precalificación — en Fresh Home Loan hablamos tu idioma y creemos en tu futuro.”