A reverse mortgage can be a beneficial financial tool for homeowners aged 62 or older, allowing them to access the equity in their home without having to sell it. However, if you are considering selling your home in Oklahoma and you currently have a reverse mortgage, it’s crucial to understand what that means for your loan. Here’s a breakdown of what happens to your reverse mortgage when you sell your home in Oklahoma.
When you decide to sell your home, the reverse mortgage will need to be paid off first. The proceeds from the sale of your home will be used to satisfy the loan balance. This means that the lender will be paid back what you owe on the reverse mortgage before any profits from the sale are distributed to you.
The process is fairly straightforward: if the sale price of your home is greater than the amount you owe on your reverse mortgage, you will receive the remaining balance after the loan is settled. This can provide a significant cash infusion, allowing you to either purchase a new home or utilize the funds for other financial needs.
However, if your home sells for less than the amount you owe on the reverse mortgage, things can be different. In Oklahoma, reverse mortgages are non-recourse loans. This means that you are not personally liable for the difference. The lender can only recover the funds from the sale of your home, and if it doesn’t cover your loan balance, they cannot pursue you for the remaining amount. You will simply walk away without any further obligations.
It’s important to note that you must notify your reverse mortgage lender of your intention to sell the property. Early communication can help prevent issues later in the process, including delays in the sale or difficulties in accessing funds.
Another factor to consider is how selling your home may affect any supplemental assistance programs. If you were receiving benefits through programs like Medicaid or Supplemental Security Income (SSI), selling your home and accessing the lump sum from the reverse mortgage can impact your eligibility. Consulting with a financial advisor or legal professional can ensure you understand these implications.
Moreover, if you’re thinking about selling your home while having a reverse mortgage, it can also be advantageous to consult with a real estate agent who understands the intricacies of reverse mortgages. They can provide guidance and help you price your home competitively in the Oklahoma real estate market.
In summary, selling a home with a reverse mortgage in Oklahoma involves paying off the mortgage with the sale proceeds. If profits remain, you retain the difference, and in cases of selling for less than owed, you are protected from losses. By understanding these dynamics, you can make informed decisions about your housing and financial future.
