Wow! Personally, I have been surprised that some of my reverse for purchase buyers have also been first time homebuyers. And have recently begun working with another! (Thank you Active Rain!)
Reverse mortgage for purchase has been available since 2009. Reverse Mortgage Daily reported that a recent report from HUD showed that 75% of reverse for purchase buyers are also first time homebuyers. These are folks over 62 years of age who are taking advantage of todays home prices and finally living the American dream.
After a lifetime of work and saving they are in a position to set themselves up as homeowners using an FHA reverse mortgage and not having to make a mortgage payment. They can qualify for this loan even on a fairly low fixed income. They must qualify for and agree to pay their taxes and insurance and HOA dues (if any), but in many cases that is less expensive than any decent rental they could find. It’s such a great solution for these brand new homebuyers.
Word to the wise - a reverse mortgage does not require monthly payments and if the homeowner chooses not to make payments - the loan balance goes up. For someone who is planning to remain long term in their home, this can be a great option.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional
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iReverse Home Loans, LLC, NMLS#810502 originates reverse mortgages in Alabama, Alaska, Arizona (MB-0919584), California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon (ML-5378), Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont (1164-MB), Virginia, Washington and Wisconsin.
Important Information: Reverse Mortgages are neither "endorsed" nor "approved" by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans; the FHA does not make or originate loans. The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage loan to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified independent housing counselor, family members and other trusted advisers before making this decision. This website is not from HUD or FHA and was not approved by HUD or any government agency.