This show discusses the option of a reverse mortgage as well as the misconceptions. The loan is a good option for those that are purchasing a new home as well as refinancing. A reverse mortgage enables a senior homeowner to maintain ownership as long as they live in their home and maintain the loan requirements – paying property taxes, homeowners insurance, HOA and keeping the home in good repair. They can always pay off the loan without worry of a prepayment penalty and can still leave the house to the kids.
A Reverse Mortgage could allow a buyer to purchase a home and eliminate the monthly mortgage payment. There are qualifications and things to consider with a reverse mortgage however if a borrower is 62 years or older, it is an option to consider.
Eligible properties: Single Family Residence, Townhomes, Villas and FHA approved condos and HomeSafe for condos that are not FHA approved, but value must be 500k+ and meet lender requirements – which are the same as FHA condo approval. So there are a lot of options.
You don’t lose control of the ownership of a home with a revere mortgage. The home still is an asset and your heirs have an year to resolve the loan. The loan can sell it or pay off the loan. So many think that they are giving up ownership and that they cannot leave the home to the kids and for that reason alone, many immediately pass on the loan. I’d say it’s the biggest misconception. The other item that most don't realize is that a reverse mortgage is a non-recourse loan. This mean the house secures the loan. The borrowers and/or their heirs are not responsible for repaying the loan as it is federally insured.
Who you hire matters in your real estate purchase and your loan too. Having a great lender that is not just about the sale is so important.
Who is a good candidate: People who are moving from up north with the sale of their home. The reverse mortgage allows them to put down part of the money and leave the rest in the bank. They can use the extra money as home care, renovations and keeping money in the bank.
A Reverse Mortgage can be a great option for some buyers looking to move to Florida. Living on a fixed income can be challenging; eliminating a mortgage payment while still maintaining ownership can be a game changer.
Listen to our radio show about Reverse Mortgages