Inherited a house with a reverse mortgage
Many older Pinellas homeowners took out a reverse mortgage to cover living costs. When they pass away, the loan comes due, and the heirs get a series of letters from a loan servicer they've never heard of. Here's what those letters mean and what your choices are.
- Heirs typically have 30 days to tell the servicer what they plan to do.
- They generally have about six months to sell or pay off the loan, with possible extensions up to about a year.
- Heirs can satisfy a HECM for the lesser of the loan balance or 95% of appraised value.
- A HECM is non-recourse: heirs don't personally owe any shortfall.
What changes when the borrower dies
Most reverse mortgages are Home Equity Conversion Mortgages, or HECMs, insured by the federal government. While the borrower lives in the house, no monthly payment is due. The balance grows over time as interest and fees are added.
When the last borrower dies, the loan becomes due. The servicer, the company that manages the loan, will send letters to the house and to the estate. Those letters are not threats. They're the start of a process with set timelines, and the family has more room than it may seem at first.
One exception: if a surviving spouse lives in the house but wasn't a borrower on the loan, special rules may let them stay. If that's your situation, call the servicer and a HUD-approved housing counselor before doing anything else.
The timeline heirs are working with
| When | What typically happens |
|---|---|
| Within about 30 days | Heirs tell the servicer what they plan to do: sell, pay off, or turn the house over |
| About six months | The usual window to sell the house or pay off the loan |
| Up to about a year | Extensions may be possible if the heirs are actively working on a sale or payoff |
The key to getting extensions is communication. Answer the servicer's letters, keep a record of every call, and send them proof of progress, such as a signed purchase contract or a letter from the probate attorney showing the case is open. Servicers deal with this constantly. Silence is what causes problems.
We're not attorneys or loan experts. Your servicer and a HUD-approved counselor can tell you the exact rules that apply to your loan.
The 95% rule, explained with plain math
Heirs who want to keep or sell the house can satisfy a HECM for the lesser of two numbers: the full loan balance, or 95% of the house's current appraised value. These are made-up numbers to show the idea, not a real case.
- The house is worth more than the loan. Say the loan balance is $180,000 and the house appraises at $300,000. The lesser number is the loan balance, so the payoff is $180,000. The equity above that belongs to the estate and the heirs.
- The loan is bigger than the house. Say the balance has grown to $320,000 and the house appraises at $280,000. Ninety-five percent of $280,000 is $266,000, which is less than the balance. Heirs can satisfy the loan for $266,000.
In the second case, if the family doesn't want the house, they can usually sell it, and the federal insurance covers the gap. That leads to the most important protection of all.
Non-recourse: you don't owe the shortfall
A HECM is non-recourse. If the house sells for less than the loan balance, the heirs are not personally responsible for the difference. The lender can look only to the house, not to the heirs' own bank accounts, homes, or paychecks.
That means you can make your decision about the house without fear that a reverse mortgage will follow you. It also lines up with the broader rule in Florida: heirs are generally not personally liable for the decedent's debts. Valid debts are paid from the estate.
If the house is underwater and nobody wants to deal with it, ask the servicer about the options for turning the property over. Just know that walking away usually means giving up any chance at leftover value, so it's worth getting an offer first.
Probate still matters
A reverse mortgage doesn't replace probate. If the house was titled only in the person's name, someone needs legal authority to sell it or sign anything as owner. That comes from the probate court.
The good news is that the two clocks can run together. The servicer usually wants to see that the estate is moving, and a probate case that's filed and a signed contract are exactly that. For estates that qualify for summary administration, the court order can often come within 24 to 48 hours after the heirs sign, which helps a lot when a servicer deadline is approaching. Formal administration takes longer, and that's one more reason to keep the servicer informed. See how long probate takes.
Selling an inherited house with a reverse mortgage
- Call the servicer within the first month and tell them you intend to sell.
- Get the payoff figure and ask whether an appraisal has been ordered.
- Start probate with a Florida probate attorney, or with a buyer who arranges and pays for one.
- Sign a purchase contract and send a copy to the servicer.
- Close. The title company pays the reverse mortgage from the sale. Back taxes and other liens come out at closing too.
Pinellas Probate Home Buyers is the probate division of 131 Cash Home Buyers. When we buy, the reverse mortgage is paid from the sale at closing, we pay the probate cost of typically about $3,000 without deducting it from the heirs' share, and the house is bought as-is. Many reverse mortgage houses need work because the owner aged in place, and that's fine with us.
Questions families ask
Do I have to pay back my parent's reverse mortgage?
How long do heirs have after a reverse mortgage borrower dies?
What if the house is worth less than the reverse mortgage?
Can we sell the house before probate is finished?
What if we ignore the servicer's letters?
Keep reading
We’re a home-buying company, not attorneys. This page is general information about Florida probate, not legal advice; an independent licensed Florida probate attorney represents the estate in every probate we pay for. Last updated November 2026.
Probate and the sale, handled in one place
Call or text Alex. He’ll ask a few questions about the house and the family, explain your options plainly, and tell you honestly whether selling to us makes sense.
- We pay the probate cost, typically about $3,000
- For qualifying estates, probate is often complete in 24–48 hours
- Closing about a week later at a licensed Florida title company
- The court doesn’t set your price or closing date. You and your family do.
Timelines depend on the estate. Formal administration or a family dispute takes longer, and we’ll tell you upfront.
Tell us about the house
Share the address and the best way to reach you. Alex will follow up, usually the same day.