As of January 1, 2009 seniors, 62+, can purchase a home using a reverse mortgage. The reverse mortgage home purchase acts almost identically as a traditional forward mortgage home purchase. Acting similarly, the senior will bring in funds as a down payment from 25% to 55% of the value of the home. The mortgage company funds the balance of the loan.
This comes as a boon to some seniors as financial or credit restraints prohibit them from purchasing their next home. Now they can do so and are not obligated to make monthly payments the mortgage company.
In recent years, due to general need and national marketing by major financial institutions such as Wells Fargo and Bank of America the reverse mortgage has come into its own. Its major benefit to seniors is to allow the senior borrower to convert the equity in the home into cash to be used at the borrower's discretion.
Only at the end of mortgage, when the home is finally sold, is the borrower or the borrower's heirs obligated to repay the reverse mortgage company the original loan amount plus accumulated interest.
These are the steps to the purchase program:
1. Contact a reputable FHA approved reverse mortgage company. The borrower will be advised as to how much money will be necessary for the down payment. Additionally, closing costsm, purchase price limits and various loan programs will be discussed.
2. Go home shopping and write contract based upon guidelines in the approval letter.
3. At closing the borrower will be required to make a down payment between 25% to 55% of the value of the home.
4. At closing, the reverse mortgage company funds the remaining balance and closing costs if desired by the borrower.
5. Senior is now the new owner of the home.
6. Borrower lives in home as a primary residence. The borrower is then only obligated to pay property taxes and homeowners insurance until death or sale of property.
In the near future the typical reverse mortgage candidate will continue to be one in need of funds to relieve financial stress. The reverse mortgage purchase, however, will cater to a certain profile and offer a viable financial tool.
This comes as a boon to some seniors as financial or credit restraints prohibit them from purchasing their next home. Now they can do so and are not obligated to make monthly payments the mortgage company.
In recent years, due to general need and national marketing by major financial institutions such as Wells Fargo and Bank of America the reverse mortgage has come into its own. Its major benefit to seniors is to allow the senior borrower to convert the equity in the home into cash to be used at the borrower's discretion.
Only at the end of mortgage, when the home is finally sold, is the borrower or the borrower's heirs obligated to repay the reverse mortgage company the original loan amount plus accumulated interest.
These are the steps to the purchase program:
1. Contact a reputable FHA approved reverse mortgage company. The borrower will be advised as to how much money will be necessary for the down payment. Additionally, closing costsm, purchase price limits and various loan programs will be discussed.
2. Go home shopping and write contract based upon guidelines in the approval letter.
3. At closing the borrower will be required to make a down payment between 25% to 55% of the value of the home.
4. At closing, the reverse mortgage company funds the remaining balance and closing costs if desired by the borrower.
5. Senior is now the new owner of the home.
6. Borrower lives in home as a primary residence. The borrower is then only obligated to pay property taxes and homeowners insurance until death or sale of property.
In the near future the typical reverse mortgage candidate will continue to be one in need of funds to relieve financial stress. The reverse mortgage purchase, however, will cater to a certain profile and offer a viable financial tool.
About the Author:
To learn more about purchasing a home with a reverse mortgage go to The Quintessential Guide to the Reverse Mortgage in Texas. Everyday reverse mortgage queries answered at Texas Reverse Mortgage Public Knowledge Base and Guide.
Posts
No comments:
Post a Comment