Selling a house in Ontario is already a big deal—but throw a reverse mortgage into the mix and suddenly, you’re dealing with a few extra layers. If you or a loved one took out a reverse mortgage and now you’re ready to move, downsize, or settle an estate, you might be wondering, “Can I even sell this place?” The short answer? Yes, you absolutely can. The longer answer? Well, let’s walk through it together.
At Bloom Homes, we help people all across Ontario sell homes fast, no matter the situation—including homes with reverse mortgages. And whether you want to sell for cash, use seller financing, or list with an agent, there’s a solution that fits.
What Is a Reverse Mortgage Anyway?
A reverse mortgage is a loan that lets homeowners—usually 55 or older—tap into their home equity without selling the property. Instead of making monthly mortgage payments, the lender pays you either in a lump sum or regular payments. Sounds like a good deal, right?
Well, yes and no.
The loan has to be paid back eventually—usually when the homeowner moves out, sells the house, or passes away. That’s where things can get tricky, especially if you’re the one trying to sell the property now.
So, Can You Sell a House With a Reverse Mortgage?
You sure can. In fact, people do it all the time. Selling a home with a reverse mortgage just means you need to pay off that loan before (or at) closing. Once the reverse mortgage balance is paid, any leftover money is yours.
But keep in mind:
- The balance owed might be more than what was originally borrowed (because of interest).
- You’ll need to get an up-to-date mortgage payoff statement before listing or accepting an offer.
- Timing matters—especially if the borrower has passed away and you’re settling the estate.
If that sounds like a lot, don’t worry. Bloom Homes has helped plenty of Ontario homeowners deal with exactly this.
Common Reasons People Sell Homes With Reverse Mortgages
Let’s face it—not every house is meant to be kept forever. Here are some of the main reasons folks decide to sell:
- The homeowner has moved into assisted living or passed away.
- The property’s become too much to maintain.
- The family wants to unlock the remaining equity.
- There’s a plan to downsize or relocate.
- The house was inherited and needs to be sold to settle debts.
In each of these cases, selling the house is often the easiest and cleanest way to move forward.
What Happens to the Reverse Mortgage When You Sell?
When the home is sold, the reverse mortgage lender gets paid back directly from the sale proceeds. If there’s any equity left over, it goes to the homeowner (or the estate, if the borrower has passed away). Here’s a breakdown of how it usually goes:
- Request a payoff quote from the lender.
- List the property or get a cash offer.
- Accept an offer and move to closing.
- Lender gets paid from the proceeds.
- You or the heirs keep the rest (if there’s any equity left).
Pretty straightforward, right?
What If the House Is Worth Less Than the Loan?
Let’s say the house sells for less than what’s owed on the reverse mortgage. That can happen—especially if home values have dropped or the loan balance has grown due to interest over time.
Good news? Reverse mortgages are “non-recourse loans.” That means the lender can’t come after you (or your heirs) for the difference. They can only collect what the house sells for, and mortgage insurance usually covers the rest.
So if you’re in that boat, you can still move forward without taking a financial hit.
Tips for Selling a House With a Reverse Mortgage
It’s not rocket science, but there are a few things you’ll want to keep in mind if you’re selling a house with a reverse mortgage in Ontario:
1. Start With the Paperwork
Call the lender and ask for the latest payoff amount. This will show how much needs to be paid off at closing. They might take a few days to get it to you, so don’t leave this to the last minute.
2. Know Your Timeline
Most lenders give up to 6 months to sell the home after the borrower dies or permanently moves out. In some cases, you can request a 90-day extension. Just don’t ignore the deadlines—if you wait too long, the lender could foreclose.
3. Clean Up and Prep the Property
Even if it’s not in perfect shape, a clean and clutter-free home shows better. If it needs repairs and you can’t afford them, consider selling the property as-is for cash.
4. Explore Selling Options
There’s no one-size-fits-all solution, which is why Bloom Homes offers multiple paths:
- Cash offers if you want to sell quickly and skip repairs
- Seller financing if you want monthly payments instead of one lump sum
- Listing with an agent if the home is market-ready and you’re not in a rush
- Lease-to-purchase if the buyer needs time before finalizing the sale
5. Get Legal Advice If You Need It
If there are multiple heirs or disputes over the property, it might be smart to speak with a lawyer familiar with Ontario real estate and estate law.
Should You Sell It Yourself or Go With a Cash Buyer?
If you’re comfortable waiting a bit and handling showings, listing the home might get you top dollar. But if the house needs work, the timeline is tight, or you just don’t want the hassle, a cash offer can make life a whole lot easier.
Here’s a quick side-by-side look:
| Selling Option | Pros | Cons |
|---|---|---|
| Listing with agent | Potential for higher price | Repairs, commissions, longer timeline |
| Selling for cash | Quick close, no fees, as-is sale | Possibly less money upfront |
| Lease-to-purchase | Passive income, flexible buyer terms | Longer timeline to full payout |
| Seller financing | Keeps monthly income coming in | Involves holding some risk |
Whatever you decide, it’s smart to get multiple offers and compare. Don’t just jump on the first one that comes along—especially if the buyer seems pushy or vague.
Why Work With Bloom Homes?
We’re not a big national chain. We’re a local business that’s helped Ontario homeowners in all kinds of situations—reverse mortgages, foreclosures, inherited homes, tired rentals, you name it.
When you reach out to Bloom Homes, you’re not just getting a cash buyer. You’re getting real advice and honest options that fit your timeline, your goals, and your comfort level.
And guess what? If we’re not the right fit, we’ll even point you in the direction of someone who is. That’s how confident we are that selling your home can actually be a stress-free experience.
How to Get Started
Thinking about selling a house with a reverse mortgage in Ontario? You don’t have to go it alone. Here’s how to start:
- Gather your mortgage documents – Know what’s owed and the lender’s contact info.
- Request the payoff statement – It’ll tell you how much is due.
- Contact Bloom Homes – We’ll walk you through your options, no pressure.
- Choose the path that fits – Whether it’s a cash sale or another solution.
You’re just one conversation away from turning a complicated situation into a smooth sale.