Randy Thomas, former Wells Fargo Consultant, Specialist in Reverse Mortgages, 630-820-5209
For Those 62 & Older, This Still Can Be A Buyer's Opportunity Market!
April 30th, 2010, ended the government's tax incentives program which benefited many individuals. In this section, I am limiting my discussion towards individuals who are 62 and older, focusing on the financing opportunities available to them.
In the past, the biggest objection to a reverse mortgage has been its cost. You will need to compare ORIGINATION and SERVICE FEES to determine which company has the best package deal. It is possible that the reverse mortgage costs LESS than a FHA purchase!
Another concern is what happens when the owner passes away? If the market is down, the bank (whoever has the loan) will extend the market time in 90 day increments beyond the previous year's selling-time requirement..
Another concern deals with who benefits if the property values increase? The answer is the ESTATE will receive the added revenue.
The Highlights of a REVERSE MORTGAGE for a HOME PURCHASE follows. The buyers must be, at least, 62 years old. A DOWN PAYMENT from the home's sale or from the buyer's assets (CD's, IRA'S, savings). There are NO CREDIT CHECKS or INCOME REQUIREMENTS! The money received must be used to purchase a PRIMARY RESIDENCE. The costs incurred are similar to those of a conventional mortgage. The bank gives a percentage of the home's appraised value, which is determined by a formula: the younger the applicant, the less money granted. (The range: 60% to 85% based upon the age of the youngest applicant--the older the age, the more $'s received. & the buyer brings the difference to the closing. There are NO MORTGAGE PAYMENTS! The buyer keeps the ownership of the home! His/her responsibilities are to pay the taxes, insurance, assessments, & maintain the home. The buyer does NOT have to sell the home, the property or repay the loan, and lives there until his/her death. The heirs can take on a conventional home mortgage. There is a required counseling session to determine whether a reverse mortgage is right for the buyer. This can be accomplished in person on the telephone, & this HUD REVERSE MORTGAGE COUNSELOR will present the applicant with a certificate of completion called "The Borrower's Counseling Certificate." FHA will appraise, verify the value of the property. After closing, the buyer has 60 days to move into the home! Just imagine. NO MORTGAGE PAYMENTS!
"There are many applications for a Reverse Mortgage in relation to buying real estate. In addition to purchasing a primary residence, it is a great tool for someone that wants to buy investment property, or a second home. Another great use is to help your adult children take advantage of the current Real Estate Market & provide them with the down payment on their purchase without effecting their retirement investments."