How to Sell a House With a Reverse Mortgage
A Reverse Mortgage Doesn’t Stop You From Selling
A reverse mortgage lets homeowners 62 and older borrow against the equity in their home without making monthly mortgage payments. For many families it was the right tool at the right time. But eventually the loan comes due, and that moment tends to arrive during a hard season of life: a parent has passed away, a loved one is moving into care, or the homeowner can no longer keep up with taxes, insurance, and repairs.
The good news is that a house with a reverse mortgage can be sold like any other house. The loan is paid off from the sale proceeds at closing, and whatever equity is left belongs to the owner or the estate. The challenge isn’t whether you can sell — it’s that the servicer’s clock is running, interest keeps adding to the balance, and the house often needs more work than the family has time or money to put into it.
We buy houses with reverse mortgages throughout Texas and Georgia — as-is, for cash, with no repairs, no commissions, and a closing date that fits inside the servicer’s deadline. If you’re working through an estate, our guides to selling an inherited home in Texas and in Georgia cover the rest of the process.
⏰ If you’ve received a due-and-payable notice, don’t wait. The response window is short, and servicers are generally much more flexible with families who stay in contact and show progress.
When a Reverse Mortgage Comes Due
The most common type of reverse mortgage is a Home Equity Conversion Mortgage, or HECM, which is insured by the FHA. A HECM generally becomes due and payable when:
- The last surviving borrower passes away
- The borrower sells the home or no longer lives in it as a primary residence, including a long-term move into assisted living or a nursing facility
- The borrower falls behind on property taxes or homeowners insurance, or doesn’t keep the home in reasonable repair
Throughout all of this, interest and mortgage insurance premiums keep accruing, so the balance grows every month the home sits.
The timeline after a borrower passes away
Once the servicer is notified of a death, it sends a due-and-payable notice. The general framework for a HECM looks like this, though every servicer and situation is a little different:
- About 30 days to respond. Heirs generally have 30 days from the notice to tell the servicer what they plan to do.
- Up to 6 months to resolve it. Heirs can sell the home, pay off the loan, or turn the property over to the lender.
- Possible extensions. Two additional 90-day extensions may be available with HUD approval if you can show you’re making progress, such as a signed contract or an active estate case.
That adds up to as much as a year in the best case, but it isn’t automatic, and extensions typically depend on documenting that the sale is moving forward. Other types of reverse mortgages, including private “proprietary” loans, can follow different rules, so confirm the specifics with the servicer. Surviving spouses may also have additional protections depending on the loan, so raise that with the servicer and an attorney right away.
Why Families Choose Us for Reverse Mortgage Sales
Built for the Reverse Mortgage Timeline
Fits Inside the Deadline
A 7 to 28 day close leaves room to spare inside the windows servicers typically give heirs, instead of burning months on a listing.
Deferred Maintenance Welcome
Homes with years of postponed repairs are common here. We buy as-is, with nothing to fix, clean out, or update first.
Payoff Handled at Closing
The loan is paid off directly from the proceeds through a licensed title company, and any remaining equity goes to you or the estate.
Estates and Out-of-State Heirs
We work with executors, administrators, and heirs in other states, with remote signing options and documentation of authority handled the right way.
What Owners and Heirs Can Actually Do
If the house is worth more than the loan
This is the simplest case. The house sells, the reverse mortgage is paid off at closing, and the remaining equity is yours or your estate’s. For an estate, that money passes to the heirs as part of the normal probate process. The goal in this situation is simply to sell at a fair price before the growing balance eats into the equity.
If the loan is worth more than the house
This is where families worry most, and where the HECM rules help. These loans are non-recourse, which means heirs are generally not personally responsible for more than the home is worth. Heirs can resolve the loan by paying the lesser of the balance or 95% of the home’s appraised value, and FHA insurance covers the shortfall. In some cases, heirs can also hand the property back to the lender with a deed in lieu of foreclosure.
It’s worth being honest about one limit: because the 95% figure is based on an appraisal, a house in rough condition may appraise well above what a cash buyer can pay for it. If that’s your situation, we’ll tell you upfront whether a sale works or whether another route is a better fit to discuss with your attorney. We would rather give you a straight answer than waste your deadline.
If heirs want to keep the home
Heirs who want to keep the property can pay off the loan, usually by refinancing into a traditional mortgage or using other funds. The same 95% rule applies, which can make the payoff lower than the full balance. If you’re comparing paths, our guide to what happens to a mortgage when you sell for cash explains how any payoff works at the closing table.
Where a cash sale fits
A cash sale makes the most sense when the house needs work, the estate or the family can’t afford to carry it, there are several heirs who don’t want the burden of managing a sale, or the servicer’s deadline is approaching. If the property has multiple owners, see our guide on selling a partial interest in property.
| List It Traditionally | Royal Groups Realty | |
|---|---|---|
| Repairs and cleanout before listing | Often needed | None needed |
| Agent commissions | ~6% of sale price | $0 |
| Fits a short servicer deadline | Often tight | Closes in 7–28 days |
| Balance growing while you wait | Yes, for months | Minimal |
| Time to close | 60–120+ days | 7–28 days |
What to do first
Start with the servicer. Ask for a payoff statement, confirm the deadline in writing, and ask what documents they need to approve an extension. If the borrower has passed away, work with the estate’s attorney to confirm who has legal authority to sell — our probate real estate guide explains how that works in Texas and Georgia. Then send us the address and the payoff amount, and we’ll give you an offer within 24 hours. For plain-English definitions of terms like lien, net proceeds, and as-is sale, see our real estate glossary, and our guide on how much cash home buyers pay explains how every offer is calculated.
⚖️ This article is general information, not legal or financial advice. Reverse mortgage terms vary by loan type and servicer. Confirm your specific deadlines with your servicer and consult a licensed Texas or Georgia attorney about your situation.
Frequently Asked Questions
Yes. The reverse mortgage is paid off from the sale proceeds at closing, and anything left over after the payoff belongs to you or your estate.
With the most common type, a HECM, the loan becomes due and payable. The servicer sends a notice, heirs generally have 30 days to respond with a plan, and then up to 6 months to sell, refinance, or turn the home over to the lender. Two additional 90-day extensions may be available with HUD approval if you can show progress. Other types of reverse mortgages can work differently, so confirm the details with the servicer.
Generally no. HECM loans are non-recourse, which means heirs are not personally liable for more than the value of the home. Heirs who want to resolve the loan can pay the lesser of the loan balance or 95% of the home's appraised value.
Usually the person selling needs legal authority to do so, such as authority as an executor or administrator, or a muniment of title order in Texas. The requirements depend on the state and the estate, so confirm with the estate's attorney. We require documentation of authority before closing.
Yes, as long as the loan can be paid off at closing from the sale price. If the loan balance is higher than what the house can sell for, we will tell you upfront whether a sale works or whether another route, such as a deed in lieu, may be a better fit to discuss with your attorney.
Once legal authority to sell is in place, closing can happen in as little as 7 to 28 days, which fits comfortably inside the response windows most servicers give heirs.
No. We buy as-is, including homes with years of deferred maintenance, which is common with older homeowners who could no longer keep up with repairs.
No. This is general information about how reverse mortgages typically work when a home is sold, not advice for any specific situation. Confirm your deadlines with your loan servicer and talk to a licensed attorney or financial professional.