You Sure Can! It’s Called a Reverse Purchase Mortgage
With as little as 50% of a purchase price*, qualifying seniors can utilize a Reverse Purchase Mortgage, (or “Home Equity Conversion Mortgage (HECM) for Purchase” loan), which allows people 62 and older to purchase a new principal residence with HECM loan proceeds.
A Reverse Purchase Mortgage (HECM for Purchase) requires that you be 62 years of age or older and that the home you are purchasing be your primary residence. You will need to have cash available for the down payment, which can be as little as 50% of a home’s purchase price, but like all reverse mortgage loans, you will not have to make monthly payments on the HECM for Purchase loan. Imagine paying 50 cents on the dollar to buy a home, and never having a mortgage payment! Naturally, you will still need to fulfill the reverse mortgage requirements, such as living in the home as your principal residence, keeping the home in good condition, and paying your property taxes and homeowners/flood insurance premiums on time; these are normal elements of a reverse mortgage.
The Secret to a Successful Reverse Purchase Mortgage
The secret to a successful reverse purchase mortgage is simple: make sure you are working with a hands-on, local reverse mortgage firm with actual experience closing Reverse Purchase loans specifically in your area. It is quite difficult to manage a purchase transaction from 3000 miles away, so why even tempt fate with a West Coast reverse mortgage company that knows very little about Florida real estate and the nuances that come with it? Florida Dream Home Loans – Reverse Mortgage Company not only has the experience with Reverse Purchase Mortgages!
When you secure a pre-approval with Florida Dream Home Loans, you are also securing a Licensed Reverse Mortgage Loan Officer who is local to Florida, will meet you at your home or at the office to pre-qualify, collect documents, and take your application, as well as being present at the closing itself. We will work hand in glove with your realty team and can handle coordination of your transaction to ensure a smooth and timely closing. You will be explained every single page of what you are signing and why, and will be treated face-to-face with dignity, respect, and confidentiality. We have no peers when it comes to the service we provide and you can expect; we don’t have to pay millions to celebrity endorsements either, so we can offer more competitive rates.
It’s important to know that we will be with you every step of the way, from the application to your closing, explaining the information to you as we move forward so you know exactly where you are in the loan & home buying process. We ARE the local & trusted experts and we deliver!
Get a Free No-Obligation Reverse Mortgage Consultation
A pre-approval is a conditional customer approval which means a lender has looked at most of the required supporting documentation for your loan upfront. It’s a quick process and on no cost to you – it’s good for 60 days and can be updated if needed.
What Is Required for a Reverse Mortgage?
Property Type
If you own a house, condominium, townhouse, or manufactured home built on or after June 15, 1976, then you may be eligible for a reverse mortgage. Under FHA rules, cooperative housing owners cannot obtain reverse mortgages since they don’t technically own the real estate they live in: they own shares of a corporation. In New York, where co-ops are common, state law further prohibits reverse mortgages in co-ops, allowing them only in one- to four-family residences and condos.
Age, Equity, and Fees
While reverse mortgages don’t have income or credit score requirements, they still have rules about who qualifies. You must be at least 62 years old, and you must either own your home free and clear or have a substantial amount of equity (at least 50%). Borrowers must pay an origination fee, an up-front mortgage insurance premium, other standard closing costs, ongoing mortgage insurance premiums (MIPs), loan servicing fees (sometimes), and interest. The federal government limits how much lenders can charge for many of these items.
Counseling
The U.S. Department of Housing and Urban Development (HUD) requires all prospective reverse mortgage borrowers to complete a HUD-approved counseling session. This counseling session, which usually costs around $125, should take at least 90 minutes and cover the pros and cons of taking out a reverse mortgage given your unique financial and personal circumstances.12
U.S. Department of Housing and Urban Development. “HECM Counseling Fees.”
It should explain how a reverse mortgage could affect your eligibility for Medicaid and Supplemental Security Income (SSI). The counselor should also go over the different ways that you can receive the proceeds.
Collateral Protection
Your responsibilities under the reverse mortgage rules are to stay current on property taxes and homeowners insurance (and homeowners association fees, if you have them) and keep the home in good repair. And if you stop living in the house for longer than one year—even if it’s because you’re living in a long-term care facility for medical reasons—then you’ll have to repay the loan, which is usually accomplished by selling the house.
Explore your options with a Reverse Mortgage Purchase loan
Now may be the perfect time to make a move!
Rewriting the RULES of Retirement
Retirement comes with more time for the things you love. A Florida Reverse Mortgage can help you fund them
- Pay off your existing mortgage to eliminate monthly payments
- Get additional income tax-free cash to use for what matters most
- Continue to own your home just like a traditional mortgage
As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and keeping your home in good condition. Consult a financial advisor and appropriate government agencies for any effect on taxes or government benefits.
