Reverse Mortgage Information

 
Here is some information on utilizing FHA Reverse Mortgages to double or more your purchase power on your new Sun Lakes home and still not have any monthly mortgage payments!

 There are 3 Major Benefits To  Home-buyers

• Gives home-buyers who are downsizing more purchasing power than if they had to pay all cash
• Designed to allow your seniors to purchase a new principal residence and obtain a Reverse Mortgage within a single transaction by eliminating the need for a second closing.
• Buyers do not have to "qualify" for monthly payments on the new purchase transaction.  A significant detail to senior home-buyers on a fixed income. 

Other Benefits to Home-buyers

• Eliminates Monthly Mortgage Payments
• Borrower Maintains The Title
• Loan Is Non-Recourse
• Remaining Equity Goes To Borrower Or Borrower's Heirs, Not The Bank
• No Pre-Payment Penalty
• FHA-Insured
• Usually No Income Verification Or Credit Score Requirement (If buyer is retaining their former home as rental property there are income requirements) 

* Certain transactions will require "qualification" - ask your Reverse Mortgage Specialist for specific details.

HECM- Home Equity Conversion Mortgage) We pronounce it "Heckum"

• • FHA defines "HECM for Purchase" as a real estate purchase where title to the property is transferred to the HECM borrower, which the borrower will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property.

Lakeside Condos are now FHA Approved!

Ask your Realtor about using an FHA Insured Reverse Mortgage to purchase your new Sun Lakes home!

Can I buy a house with a reverse mortgage?

There are two ways to buy property with a reverse mortgage.  Here are examples of each.

Mr. and Mrs. Z own their home in Southern California.  They have lived there for 50 years and wouldn’t dream of moving away.  They dream of a vacation home in the green state of Oregon, not far from a great fly fishing river and only an hour away from their youngest son, daughter in-law and 3 grandkids.  They seem to visit at least 3 or 4 times a year, but always enjoy coming home to the house they raised the family in where they know everyone, and are involved in the community.  The last trip up, they saw a cute 2 bedroom home for sale in the perfect spot.  The asking price, only $195,000, sure it doesn’t have garage but it’s a perfect get away home, just what they’ve always dreamed of.   They don’t want to take funds from their retirement to buy it, and certainly don’t want to have a mortgage on it that would eat into their cash flow. Instead, they take out a reverse mortgage on their home in Southern California.  The reverse mortgage proceeds net them $210,000 in cash.  They buy the vacation home for cash and use the rest of the funds to repaint and furnish it.  They even have enough left over to put in a new tile floor in the kitchen and master bath of the house in California!

 They still have no house payments in California AND they have a vacation home in Oregon free and clear that they can enjoy.  The grown kids are thrilled because mom and dad have a cool vacation home that they will inherit free and clear and they don’t plan to keep the house in California after their parents pass away – it’s a win win for all concerned.

Mr. J is a widower who has recently found love again.  He and his bride to be recently each sold their previous homes and are thinking about paying cash for a new home.  Instead, they decide to save some of their cash and purchase their new home with a reverse mortgage.  They find a great home at Trilogy in Corona, a 55+ resort style community with a gorgeous golf course and a clubhouse to die for.  Trilogy is full of leading edge baby boomers like them and they have some friend there already.   They put $180,000 down on the new home and the reverse mortgage finances the balance of the $400,000 purchase price. 

So, $180,000 gets them into a newer home in a great, safe, luxury community with no mortgage payments and they have a nice not so little nest egg from the balance of their proceeds on the sale of their two homes. In fact – they think about keeping one of the homes as a rental property. Hmmmm.

Yes – they must always keep current on taxes, insurance and HOA, just as they would if they paid all cash.

So my Realtor friends, do these stories bring anyone to mind?  If so, please feel free to give me a call and let’s brainstorm about how FHA Insured Reverse Mortgages can help you sell more 

HECM - Home Equity Conversion Mortgage) We pronounce it "Heckum"

• FHA defines "HECM for Purchase" as a real estate purchase where title to the property is transferred to the HECM borrower, which the borrower will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property.

There are 3 Major Benefits To Senior Homebuyers

• Gives homebuyers who are downsizing more purchasing power than if they had to pay all cash
• Designed to allow your seniors to purchase a new principal residence and obtain a Reverse Mortgage within a single transaction by eliminating the need for a second closing.
• Buyers do not have to "qualify" for monthly payments on the new purchase transaction.  A significant detail to senior homebuyers on a fixed income. 

Other Benefits to Senior Homebuyers

• Eliminates Monthly Mortgage Payments
• Borrower Maintains The Title
• Loan Is Non-Recourse
• Remaining Equity Goes To Borrower Or Borrower's Heirs, Not The Bank
• No Pre-Payment Penalty
• FHA-Insured
• Usually No Income Verification Or Credit Score Requirement (If buyer is retaining their former home as rental property there are income requirements) 

* Certain transactions will require "qualification" - ask your Reverse Mortgage Specialist for specific details.

An Example - Bob and Betty Buyer are purchasing a single story home and selling their two story family home.

• Bob is 76 and Betty is 75
• The clients' proceeds on their existing home after all expenses will be approximately $152,000.00
• With $152,000 to put into a new home and a HECM loan the clients have the purchasing power to obtain a home valued at up to $350,000 with no monthly mortgage payments - EVER!

I am happy to provide training and expertise to you on the HECM For Purchase.  Please email me or contact me through the links on this blog.  The training class is 1 hour in length and makes for a fun, learning experience to prepare you for this next great step in your life.

Deborah Nance, Reverse Mortgage Professional for Corona, the Inland Empire and Southern Californa.