If you’re a homeowner in Nevada wondering, “Can you sell a house with a reverse mortgage?” the answer is yes! Selling a home with a reverse mortgage is possible, but it involves specific steps and considerations. Whether you’re in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi, understanding the process can help you make informed decisions. At Craig Team Realty, we’re here to guide you through selling your home in Nevada’s real estate market. This article explains how to sell a house with a reverse mortgage, what to expect, and how our team can assist.
What Is a Reverse Mortgage?
A reverse mortgage, often called a Home Equity Conversion Mortgage (HECM), is a loan for homeowners aged 62 or older. It allows you to convert part of your home’s equity into cash without making monthly payments. Instead, the loan is repaid when you sell the home, move out permanently, or pass away. In Nevada, reverse mortgages are popular for seniors in cities like Reno and Carson City who want to supplement retirement income while staying in their homes. The lender holds a lien on the property, but you retain ownership and the title.
How Does a Reverse Mortgage Work in Nevada?
In Nevada, most reverse mortgages are HECMs, insured by the Federal Housing Administration (FHA). Homeowners can receive funds as a lump sum, monthly payments, or a line of credit. To qualify, you must:
- Be at least 62 years old.
- Own the home outright or have a low mortgage balance.
- Live in the home as your primary residence in areas like Sparks, Fallon, or Dayton.
- Keep up with property taxes, homeowners insurance, and home maintenance.
- Complete a HUD-approved counseling session to understand the loan’s terms.
- Or you purchase a home with a reverse purchase loan.
The loan balance grows over time due to interest and fees, reducing your home’s equity, but is often offset with the increasing value of your home. When you sell the home, the proceeds first go toward repaying the reverse mortgage.
Can You Sell a House with a Reverse Mortgage?
Yes, you can sell a house with a reverse mortgage in Nevada at any time. Your lender cannot prevent you from selling, as you own the home. Whether you’re in Fernley, Minden, or Virginia City, you have the freedom to sell for reasons like downsizing, moving closer to family, or relocating to a senior living facility. However, the reverse mortgage must be repaid upon sale, including the loan balance, interest, and fees.
Key Considerations for Selling a Home with a Reverse Mortgage
Selling a home with a reverse mortgage in Nevada is similar to selling with a mortgage, but there are important factors to consider:
- Lien on the Property: A reverse mortgage creates a lien, meaning the lender has a legal claim to the sale proceeds to cover the loan balance.
- Home Value vs. Loan Balance: If your home in Reno or Silver Springs has appreciated, the sale may cover the loan and leave you with extra funds. If the home’s value is less than the loan balance (an “underwater” mortgage), you won’t owe more than the home’s appraised value due to the non-recourse rule of HECMs.
- Non-Recourse Protection: With an FHA-backed HECM, you or your heirs won’t owe more than the home’s value at sale. Mortgage insurance covers any shortfall if the sale price doesn’t cover the loan.
- Ongoing Responsibilities: Until the sale closes, you must maintain the home, pay property taxes, insurance, and any HOA fees in places like Sun Valley or Genoa.
Steps to Sell a House with a Reverse Mortgage in Nevada
Selling a home with a reverse mortgage in Northern Nevada requires careful planning. Here’s a step-by-step guide to help homeowners in Sparks, Carson City, or Silver Springs navigate the process:
- Contact Your Lender: Inform your reverse mortgage lender of your intent to sell. Request a payoff quote in writing to understand the total amount owed, including the loan balance, interest, and fees. This is critical whether you’re in Fallon or Moundhouse.
- Get a Market Opinion: Work with a Realtor to learn your home's current market value. In Nevada real estate markets, home values in cities like Reno and Gardnerville can vary. Comparing the market opinion to the payoff quote helps you estimate potential proceeds.
- Work with an Experienced Realtor: Partner with a knowledgeable real estate agent, like those at Craig Team Realty, who understands reverse mortgages. They can market your home effectively in areas like Verdi or Stagecoach and ensure compliance with Nevada real estate laws.
- Prepare the Home for Sale: Maintain the home’s condition to attract buyers. This might include minor repairs or staging, especially in competitive markets like Sparks or Carson City.
- Market and Sell the Home: List your home and work with your realtor to negotiate offers. Ensure the sale price aligns with the appraised value to maximize proceeds, particularly in Silver City or Virginia City.
- Close the Sale: At closing, the sale proceeds first pay off the reverse mortgage. Any remaining funds go to you. Confirm with your lender that the loan is fully paid and the account is closed.
What Happens to the Proceeds?
When you sell your home in Nevada, the proceeds are distributed as follows:
- Loan Repayment: The reverse mortgage balance, including interest and fees, is paid first.
- Remaining Equity: If the sale price exceeds the loan balance, you keep the difference. For example, if your Reno home sells for $450,000 and you owe $280,000, you receive about $170,000 (minus closing costs and realtor commissions).
- Underwater Mortgage: If the home sells for less than the loan balance (e.g., $400,000 sale with a $450,000 loan), the lender receives the sale proceeds, and FHA mortgage insurance covers the shortfall. You won’t owe additional funds.
Special Situations: Selling After the Homeowner’s Passing
If you’re an heir in Dayton, Fallon, or Minden dealing with a home that has a reverse mortgage after the homeowner’s passing, the process differs slightly. The loan becomes due when the last borrower or eligible non-borrowing spouse passes away. Heirs have 30 days to decide whether to:
- Pay Off the Loan: Use personal funds or a new mortgage to pay the balance and keep the home.
- Sell the Home: Sell the property to repay the loan. If the sale price covers the loan, any excess goes to the estate. If it doesn’t, mortgage insurance covers the difference for HECMs.
- Deed in Lieu of Foreclosure: Transfer the home to the lender to avoid foreclosure, though this may not be ideal if the home has significant value.
Extensions of up to six months may be available to sell the home. Consulting a HUD-approved counselor or real estate professional in Nevada is recommended.
Why Work with Craig Team Realty?
Selling a home with a reverse mortgage in Northern Nevada’s real estate market can feel overwhelming, but Craig Team Realty, led by Cassie Craig, simplifies the process. Our team has extensive experience helping homeowners in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, and Verdi. We understand Nevada’s unique real estate landscape and can:
- Guide you through the reverse mortgage payoff process.
- Market your home to attract buyers in competitive areas like Sparks or Carson City.
- Ensure compliance with Nevada real estate laws and FHA regulations.
- Provide personalized support to maximize your sale proceeds.
Our goal is to make selling your home stress-free while helping you achieve your financial and lifestyle goals.
Tips for a Successful Sale
To ensure a smooth sale in Nevada’s real estate market:
- Act Quickly: Notify your lender early to avoid delays, especially if you’re in Fernley or Silver Springs.
- Maintain the Home: Keep up with repairs and property taxes to prevent default, whether in Genoa or Moundhouse.
- Understand Costs: Account for realtor commissions, closing costs, and any interest or fees on the reverse mortgage.
- Seek Professional Advice: Work with a realtor familiar with reverse mortgages and consult a financial advisor for tax or estate planning questions.
Contact Craig Team Realty for Expert Guidance
Selling a house with a reverse mortgage in Nevada doesn’t have to be complicated. Whether you’re in Reno, Sparks, Carson City, or any other Northern Nevada community, Craig Team Realty is here to help. Cassie Craig and our team are dedicated to guiding you through every step, ensuring a smooth and successful sale. Ready to explore your options? Contact us today at (775) 306-7591 to discuss selling your home and achieving your goals in Nevada’s real estate market.