Reverse Mortgage Scheme
Home Equity Conversion Mortgage
Tips For Buying A Home Using Reverse Mortgage Scheme
Reverse mortgages correlate with the refinancing an existing home but they can also be used for buying a new home. Most senior citizens take advantage of reverse mortgage in order to help them stay in their home when they get older. They have also used these mortgages for transforming equity in their homes to cash sans burdening themselves out of foreclosure or a huge monthly payment. Not all the individuals are qualified for the reverse mortgage or Home Equity Conversion Mortgage. But the eligible individuals can deploy it for buying their dream house and get rid of burdening monthly payments.
Eligibility Criteria For Reverse Mortgage:
The eligibility criteria and the rules for repayment are almost same for a regular HECM and HECM for purchase.
- You should be minimum 62 years of age.
- You must reside in the home as the main residence.
- There will be no monthly payment.
- The loan will be repaid when you move, sell or pass away
- The proceed will be tax-free
- You should stay updated with the required property expenses including homeowner’s insurance, home maintenance, and property taxes.
Instead of acquiring a reverse mortgage on your existing home, you can intimate the lender that you are wishing to purchase a new home using HECM for purchase program. The lender will be calculating the amount of money that you are qualified to receive through the program. Basically, the loan amount and qualification are determined based on down payment, your age and the estimated value of your property. Assuming that you are qualified for the money to purchase the home, you have the liberty of living in the home as long as your desire.
Benefits Of Reverse Mortgage For Purchase:
The interest rates, fees, terms and conditions of the loan are same as that of a typical reverse mortgage, which means that you need not have to make any kind of payments as long as you reside in the property. Moreover, you need not pay any of the money you borrowed under Reverse mortgage for purchase until you or your partner live in the property. Of course, it is extremely important to maintain the home in the best possible condition and should pay off the insurance and taxes for the duration of reverse mortgages. Before applying for this reverse mortgage loan, you should spend some time to completely understand the working of this mortgage. So, if you do not have enough cash flow or significant retire assets, you can benefit from this HECM.