How to Resolve a Reverse Mortgage
A reverse mortgage is a means for senior citizens to take some of the value out of a home that they own free and clear of any other mortgages or liens. Payments are made by the mortgage lender to the mortgage borrower, rather than the other way around. The only way to resolve a reverse mortgage is to pay off the mortgage lender that holds the mortgage. There are a couple of ways to accomplish this: Sell the property, refinance the mortgage into a traditional mortgage or pay back the reverse mortgage lender with a cash equivalent.
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Instructions
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Evaluate the payoff amount. Contact the reverse mortgage lender and express your interest in resolving the reverse mortgage. Ask for the payoff amount you need to come up with in order to get rid of the reverse mortgage.
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Assess your options. Evaluate which of the three main ways to resolve the reverse mortgage are viable for you. For example, if you want to continue to live in the home, then a refinance or payoff of the reverse mortgage is an option.
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Choose one of the three methods so that you can make arrangements to resolve the mortgage.
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Contact a real estate agent to list the home for sale or contact mortgage lenders to obtain mortgage refinance information. If you have enough cash to pay off the reverse mortgage balance, then contact the reverse mortgage lender for instructions on making the final payoff.
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Pay off the reverse mortgage. Use the proceeds from the sale of the home, or arrange for the new mortgage lender to pay off the existing reverse mortgage balance, or make the final payment from your own cash savings.
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Obtain a payoff letter. Once the reverse mortgage has been paid off, the reverse mortgage lender is responsible for recording the payoff in the county public records and removing the lien from the property. Also, be sure to obtain a payoff letter from the reverse mortgage company to retain for your records as proof of payoff.
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