If you’re a Utah homeowner with a reverse mortgage and you’re thinking about selling your house, you’ve probably asked yourself one of the following questions:
- Can you sell a house with a reverse mortgage?
- How do you sell a home with a reverse mortgage?
- What happens to the mortgage when you sell the house?
- Do you lose your equity?
- Do you owe more than the house is worth?
If that’s you then you’ll love today’s guide I wrote for you. Let’s jump into it…
I’m Gary, a Utah real estate investor who buys houses for cash. I’ve worked with hundreds of seniors, families, and heirs dealing with reverse mortgages, and here’s what I tell all of them:
Yes, you can sell a house with a reverse mortgage … and in many cases, it’s easier than you think.
Mary and Her Reverse Mortgage
Mary, a retired widow in Layton, called me with worry in her voice.
“Gary, I have a reverse mortgage, but I want to move closer to my daughter. Can I sell my house? Or am I stuck?”
She thought selling would be complicated… or impossible or that she’d lose her equity.
She was wrong.
Mary sold her house, paid off her reverse mortgage, kept all remaining equity, and moved to St. George to be near family.
Her final words to me were:
“I wish someone explained this sooner. I feel like I got my life back.”
If you want that same clarity, keep reading.
Can You Sell a House With a Reverse Mortgage?
Yes and it’s 100 percent legal and completely normal.
You can sell a home with a reverse mortgage at any time:
Before moving
Before downsizing
Before entering assisted living
Before death (your heirs can sell afterwards)
Before foreclosure
Before equity runs out
The reverse mortgage simply becomes due and payable when the home is sold.
That’s it.
There’s nothing scary about it once you understand the process.
How Does Selling a House With a Reverse Mortgage Work?
Here’s the simplest explanation you will find online:
- You put the house up for sale (or sell directly to someone like me for cash).
- A payoff quote is requested from the reverse mortgage lender.
- At closing, the reverse mortgage is paid off first.
- You keep all remaining equity.
This protection applies only to FHA-insured HECM reverse mortgages; private/proprietary reverse mortgages follow different rules and may not offer the same non-recourse benefit.
This makes reverse mortgages non-recourse loans, meaning the lender cannot chase you or your heirs for additional money.
This is why many people search for:
- “Can I sell my house if I have a reverse mortgage?”
- “How do you sell a house with a reverse mortgage?”
- “What happens to home equity when you sell?”
Now let’s walk through the 7 steps to make the process painless and profitable.
Step 1: Request a Reverse Mortgage Payoff Statement
This is your first move.
Your lender must give you an official payoff quote showing:
- Principal balance
- Accrued interest
- Mortgage insurance
- Servicing fees
- Any advanced taxes or insurance
- Total amount needed to settle the reverse mortgage
This document determines whether you walk away with equity, and how much.
Step 2: Determine if Selling Makes Sense Financially
Ask yourself:
Do you have equity?
Do you want to downsize?
Do you want to move closer to family?
Do you want or need cash now?
Are property taxes, maintenance, or repairs adding stress?
Most Utah homeowners with reverse mortgages are “house rich, cash poor.” Selling unlocks trapped equity.
This is especially true if:
- You bought 20+ years ago
- Your home appreciated significantly
- You live along the Wasatch Front
- You have rising repair costs
- You feel tied down by the home
Selling gives you options.
Step 3: Decide HOW You Want to Sell the Reverse Mortgage Home
You have three choices:
1. Traditional Buyer (with a realtor)
You’ll pay 6 percent commission.
You may need to repair the home.
Buyers may request updates or credits.
You’ll have showings, cleaning, and a longer timeline.
2. For Sale By Owner (FSBO)
You still handle showings, paperwork, and repairs
You still may pay a buyer’s agent
Process is slower and more stressful for seniors
3. Sell Directly for Cash (as-is)
No repairs
No commissions
Fast closing
No showings
No inspections
No hassle
You keep more equity
Most seniors I work with choose option #3 because:
It’s faster, cleaner, safer, and you walk away with cash in hand.
Step 4: Get the Home Appraised (if needed)
A reverse mortgage appraisal may be necessary if:
You’re doing a short sale
Your lender requests updated value
Your heirs are selling after your death
The payoff amount is close to the value
Otherwise, if you sell privately or for cash, you may not need a traditional appraisal.
Step 5: Understand What Happens to the Mortgage When You Sell
This is important.
When the sale closes:
The reverse mortgage is paid off FIRST
Any remaining property taxes are paid
Any liens are cleared
You receive all remaining equity
Example:
Home sells for $500,000
Reverse mortgage payoff: $240,000
Closing costs: $5,000
Your net payout is $255,000
This is why reverse mortgage homeowners often walk away with significant cash.
Step 6: If You Owe MORE Than the Home Is Worth, It Depends On Your Loan Type
Many homeowners worry, “Can you sell a house with a reverse mortgage if you owe more than it’s worth?” The short answer is: maybe — but only in certain cases.
If your reverse mortgage is a private or proprietary (jumbo) reverse mortgage, there is no automatic guarantee. Selling for less than you owe requires lender approval. The terms are defined by your loan contract — always check your paperwork or consult your lender before assuming a deficit will be forgiven.
If your reverse mortgage is an FHA-insured HECM, federal law protects you. You or your heirs can sell the home for up to 95% of its appraised value — even if the loan balance is higher. FHA mortgage insurance covers the shortfall, and no additional debt is owed beyond the home’s value. Non-recourse loan rules apply.
Step 7: Close Your Sale and Get Your Cash
At closing:
Reverse mortgage is paid off.
Liens are cleared.
Equity goes to you.
If you choose to work with me:
- No agent fees
- No repairs
- No cleaning
- No appraisal required
- No waiting
- No stress
You pick your closing date.
You walk away with cash.
It’s truly the simplest path for Utah homeowners in their 60s, 70s, and 80s.
Special Section for Utah Reverse Mortgage Home Sellers
I now want to share with you a few important things about how Utah has unique strengths that benefit you when selling:
1. Utah’s real estate market appreciation has been exceptional
Homes across Salt Lake County, Utah County, Davis County, and Weber County have skyrocketed in value. Most seniors have more equity than they realize.
2. Utah buyers LOVE as-is homes
Investors (like me) specifically seek out reverse mortgage homes because they often have deferred maintenance but great fundamentals.
3. Utah allows fast closings
Title companies here are efficient, making selling a house with a reverse mortgage even easier.
4. Family migration makes selling smart
Many Utah retirees move closer to kids or grandkids out of state. Selling unlocks the cash to do that.
5. Utah’s cost of living has outpaced many seniors’ budgets
Taxes, utilities, and repairs add up. Selling relieves the burden and restores freedom.
If you’re in Utah and want a simple, fast way out you’re in the perfect market.
What Happens When You Sell a Reverse Mortgage House After Death?
When someone passes away the heirs have two options:
1st is to Keep the House
They must pay 95 percent of the home’s current appraised value even if the loan balance is higher. That rule applies to HECM loans. Heirs with proprietary reverse mortgages must review their loan terms before assuming they have short-sale or non-recourse protections.
2nd is to Sell the House
For HECM reverse mortgages, heirs have clear federal options:
- Sell the home for 95 percent of appraised value
- Keep the home by paying off the lower of:
- the loan balance, or
- 95 percent of appraised value
HECM rules ensure heirs never pay more than the home is worth.
For proprietary reverse mortgages, heirs must follow the contract terms. There may or may not be a non-recourse limit, and the lender might require full repayment if the home sells for less.
Heirs should always check whether the loan is HECM or private before listing the property or negotiating with the lender.
Pros and Cons of Selling a Home With a Reverse Mortgage
Pros
- Unlock trapped equity
- Move anywhere you want
- Avoid foreclosure
- Get rid of property maintenance
- Pay off medical bills or debt
- Downsize for simpler living
Cons
- You must repay the reverse mortgage.
- You may need a short sale if you owe more than it’s worth. If you have a proprietary reverse mortgage, selling for less than the loan balance isn’t guaranteed, lender approval is needed.
- The process can be confusing without guidance.
But with the right buyer, selling is simple.
Thinking About Selling? Here’s Your Easiest Option.
If you’re overwhelmed, uncertain, or just done with repairs, taxes, and maintenance…
I can buy your home for cash, fast, as-is, with no fees, and help you navigate the reverse mortgage payoff step-by-step.
Many Utah seniors choose this route because there are:
- No agents
- No commissions
- No repairs
- No delays
- No complications
- Just a fair offer and a clean, fast sale.
If you’d like clarity on your situation, reach out anytime.
No pressure. No obligation. Just honest guidance.
Note: Before you proceed with any sale, we will verify whether your reverse mortgage is an FHA-insured HECM or a private proprietary loan. That classification determines whether FHA insurance (non-recourse protections) apply or whether lender approval for a short sale is required.
