Reverse mortgage florida calculator7/26/2023 If you try to purchase a home or use a reverse mortgage for a transaction that does not meet the HUD requirements, it will not work. There are no real “downsides” to purchasing with a reverse mortgage, but you do need to be sure that the borrower, property, and transaction meet the HUD program parameters. What is the downside of buying a home with a reverse mortgage transaction? Borrowers are still responsible for their maintenance on the property, the timely payment of their taxes, insurance, and any property charges (i.e., HOA Dues, if any). It allows borrowers to purchase a home with a loan program that does not require the borrower(s) to make monthly mortgage payments. With the line of credit option, you can repay funds without penalty, but if you choose to reborrow them later, you can do so.Ī reverse mortgage to purchase is when you use a reverse mortgage instead of a traditional or forward mortgage to buy a property. The adjustable rate line of credit is an “open-ended” type of loan. If you have specific goals, please let us know, and we can help you determine which option will be best for you. You can repay any or all the funds at any time with no prepayment penalty, but if you do, those funds may never be reborrowed. Some wish to repay a portion of the loan and may want to reborrow.Ī fixed-rate loan is a “closed-end” type of loan. Some borrowers want to use a fixed-rate loan and not worry about ever repaying the loan until they permanently leave home. Īll Reverse Mortgage offers both the HECM and the proprietary or Jumbo programs, giving borrowers several options. To find out what you can receive with a purchase reverse mortgage, the first step is as easy as using our reverse mortgage purchase calculator. This enables borrowers to move when they might have had to remain in a home that no longer met their needs or one they could no longer afford. ![]() ![]() Whatever the reason, the reverse mortgage allows borrowers to purchase the home and finance roughly half the purchase price with no monthly fee (some even more and some a little less, depending on the age of the youngest borrower). ![]() Many have been able to sell homes with mortgages and purchase a home that better met their needs with a reverse mortgage, simultaneously eliminating monthly payments and maintenance. Perhaps the home is a single story, has a smaller lot, or is handicap accessible. Many borrowers determine that they need to move later in life or really would like to move but find that their income may be insufficient for a conventional loan, so their ability to pay for the home that they would need/want to purchase may be limited to an all-cash transaction, thereby limiting their selection.īorrowers often look at homes in retirement communities, homes closer to family or friends, medical or other needs, or just homes that better meet their needs. Why would 62-year-old borrowers be interested in a purchase reverse? With a purchase reverse mortgage, even with younger spouses, you never have to worry about not receiving all the reverse mortgage proceeds. Therefore, should the borrowing spouse predecease the non-borrowing spouse, there are no unused funds on the line to which the non-borrowing spouse would not have access. So, unlike the line of credit option on a refinance transaction, where a non-borrowing spouse may not have access to remaining funds if something happens to the borrowing spouse before the line of credit is exhausted, the entire available line is used from the start. With a purchase reverse mortgage, borrowers use 100% of their eligible loan amount from the start of the loan to purchase the property. *Borrowers must be age 62 and over to qualify for a reverse mortgage however, eligible younger spouses of homeowners can also benefit from a purchase reverse mortgage.Ī younger spouse who also lives in the home and is on the title and agrees to the terms of the reverse mortgage (must live in the property, agree to pay the taxes, insurance, and any property charges in a timely manner, and reasonably maintain the property) is not a borrower on the loan but is known as an “ eligible non-borrowing spouse ” and can also live in the property for life without making a monthly payment on the loan – even if something happens to the borrowing spouse. With the advent of the purchase reverse mortgage, borrowers age 62 and over* can use the loan to purchase a new home and pay off an existing lien or extract equity from a property they already own. Before this announcement, the reverse mortgage was used solely to refinance existing homes. In 2009, HUD announced the availability of reverse mortgage loans for purchase transactions.
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