Closer Look At Reverse Mortgages

Closer Look At Reverse Mortgages

Before 2009, seniors were attempting to sell their homes, buying new properties, and choosing reverse mortgages. It was a lengthy and sometimes expensive process. To handle this, seniors were forced to get two different types loans. First, not only did they need to sell their first home, but they had to obtain a traditional home loan and then eventually a reverse mortgage.

The Department of Urban and Housing Development (HUD) recognized this pattern and developed a plan to significantly simplify the procedure. On January 1st 2009, HUD released the reverse mortgage purchase program. The program lets seniors obtain a new house while simultaneously getting a reverse mortgage.

Reverse Mortgage Purchase

What the reverse mortgage purchase plan does is enable a new home to be purchased by seniors while having a reverse mortgage on the current one.

The amount of money seniors can get is determined by how old they are, current interest rates, and the value of the house. Like all reverse mortgages, borrowers should be at the very least 62 years of age and attend a HUD-approved counseling session to qualify. A reverse mortgage may be used to buy one to four unit properties, condominiums, and approved manufactured domiciles.

The reverse mortgage purchase program offers seniors many advantages. Seniors who are living on a small income or have a low credit rating may be ineligible for a normal home loan. Buying a house with a reverse mortgage enables seniors to go right into a brand new residence without having to deal with a complicated mortgage evaluation process. In addition, home owners can avoid having to worry about any payments on their new home, since it’s paid for using the funds from the reverse mortgage.

The reverse mortgage loan need only be paid once the borrower passes away, or choose to move from their current home.

 

 

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