(Published on - 6/20/2018 7:49:51 PM)
I recently took a class presented by Fairway Mortgage Corporation that was about Reverse Mortgages. HECM (Home Equity Conversion Mortgage), is the most common of the reverse mortgages. With HECM you can turn your equity in your home into tax-free cash. You can use the HECM for Purchase Loan to purchase your retirement home. With this seniors can use the equity from the sale of their previous home to purchase their next primary residence. There would be no mortgage payment, but your would be responisble for insurance, taxes, and maintenance. This will increase the amount of money you have in your pocket to help with the ever increasing living expenses.
For Example: Joe sells his home and has $200,000 cash from the sell. He can use this money to purchase a $400,000 home. The $200,000 would be the initial down payment and HECM loan Joe no longer has a mortgage payment. He now only has to pay for taxes, insurance and maintenance.
Benefits of Reverse Mortgage
- No monthly mortgage payments
- Tax free cash from loan proceeds
- Increased discretionary cash flow
- Can sell your home at any time
- Some income and credit qualifications apply to ensure you have the abiltiy to pay taxes and insurance and maintenance issues as they arise, some property qualifications apply
- Borrower(s) must be 62 years or older
- Purchased home must be your primary residence
- New Property must be a single family home, 2-4 unit dwelling or FHA approved condo
- Must receive mortgage counciling from a HUD approved agency
- Must have an adequate down pament for your new home
This is just the basics, other factors do play into qualifications, such as interest rates, appraisals, etc....
If you have questions or are interested in more information click here or you can contact Linda or Beth at TheLoanProTeam@fairwaymc.com.