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I have a reverse mortgage, but I no longer want a reverse mortgage how can I pay it back without taking out a loan. I have had the mortgage about 10 or 11 years. I don't have enough money to pay back all at once can I make payments to the bank holding the mortgage? Also, can I sell some of the acres on the property that I don't use?

By Mary T. on 01.13.2019

Hi Mary,

You can pay off your reverse mortgage in whole or in part at any time with no prepayment penalty.  You can make payments, you can pay it off in “chunks” you can pay it all at one time, it’s entirely up to you and your finances.  If you wish to sell some of the land that is encumbered by the reverse mortgage without paying the loan off, that would require a partial reconveyance by the lender and would also require HUD’s participation. 

I do not believe they would participate in a partial reconveyance since the loan is sold into a security and there may not be an option for them to do it.  I think you would have to be able to pay the loan in full if you planned to sell a portion of the land in order to pay off the loan because I do not believe a lender or HUD would modify the loan with a partial reconveyance in such a way. 

Perhaps you could use a combination of payments and then refinance simultaneously with a lot split and sale of excess land to either eliminate the liens or have just a very small conventional loan remaining on the new smaller lot and improvements?  If you have family or others who can finance the payoff of the reverse mortgage, they may be able to carry the remaining balance until the lot split and sale of the excess land as well.

 

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