Listing your home for short sale can be confusing enough with a standard mortgage. So if you have a reverse mortgage, you may feel as though you have even fewer options for dealing with your financial difficulties. Fortunately, short selling your home is still a very worthwhile option for you, and one that can leave you with an incredible sense of relief. This is what to know about reverse mortgage short sales and how to make the most of them.
Defining a Reverse Mortgage
Before we can discuss how short sales with reverse mortgages work, it’s important to establish what exactly a reverse mortgage is. With standard mortgages, homeowners make regular payments toward the ownership and interest of their houses. Reverse mortgages, on the other hand, allow homeowners to cash out on the overall equity of their homes and receive payments based on the value. This is typically advantageous for people who are approaching or in retirement, as they’re already living off a fixed income.
What Are Reverse Mortgage Short Sales?
When a homeowner with a reverse mortgage seeks to leave their house, they must pay back the amount they received from their reverse mortgage. For people in a particularly tight financial situation, short sales can help by allowing a partial repayment of the loan upon the home’s sale. During these agreements, homeowners work with a short sale agent to gain the approval of the bank that holds their reverse mortgage. Once you gain approval, you’re free to list the property and sell it at a fraction of the cost of your loan.
The Benefits of a Reverse Mortgage Short Sale
Reverse mortgage short sales come with a series of benefits for the homeowner. For one, they can reduce your risk of foreclosure and protect your other assets from being seized as collateral. This goes further in eliminating your debt and reducing the overall effect on your credit. As a result, you can start rebuilding your financial and credit well-being much sooner.
This process also provides you with more control over where your house goes. You have the power to sell your home as you need rather than face lender repossession.
How To Qualify for Reverse Mortgage Short Sales
Among the most important things to know about reverse mortgage short sales is whether you qualify to participate in one yourself. Understanding whether you qualify is the key to getting a quick, decisive approval from your lender. You’ll want to be prepared to provide certain pieces of information prior to applying.
For these agreements to go through, you’ll first need an FHA (Federal Housing Administration) appraisal of your home to demonstrate its actual value. It’s also important that you show your lender proof of your financial hardship. Most of the time, the Short Sale Cooperative team will be able to get the appraisal at no cost to the seller.
If you’re in need of short sale assistance with your reverse mortgaged home, Short Sale Cooperative is a great resource. Our short sale agents have years of experience in handling both standard and reverse mortgage short sale listings. Contact us today to learn about how we can get you the deal you need.