Did you know that a Reverse Mortgage can be used for BOTH purchase and refinance?
A FHA-insured Reverse Mortgage is a loan that can bring stability to a Senior Borrower’s life because it allows a Borrower to make no monthly mortgage payments, as long as taxes, insurance and maintenance are paid on-time and as agreed. A qualified Borrower (minimum age is 62, with a significant portion of equity in their home) can access the equity in their existing home – or new home – and utilize it for any purpose that they deem important.
A Borrower does not need to have paid their home off completely to make no monthly mortgage payments.
It is important to note that every Borrower’s situation is unique and the final terms of the Reverse mortgage are determined by an algorithm that takes into account the youngest Borrower’s Age, amount of Equity and Credit history. The Borrower will need to speak to a trusted Reverse Mortgage Advisor to evaluate their specific qualifications.
For a purchase, the benefits include:
- Make no monthly mortgage payments without paying100% of the purchase price.
- Security of knowing that the Borrower will have a roof over their head, despite what home values do in the future
- Examples of ways Borrowers use the additional cash, is to make home upgrades and repairs, take a vacation, pay for health care, or make additional personal or real estate investments.
- Realtors and Mortgage Lenders: Please note that when you use a Reverse Mortgage for a Purchase, you may have NO seller credits. This includes any costs that are typically paid for by the Seller – like the owner’s portion of Title. Should you wish for the Seller to provide any type of credit or concession to the Buyer, you will need to reduce the sales price.
Most Real Estate Professionals are unfamiliar with using a Reverse Mortgage to purchase the Borrower’s new primary residence. Understanding this loan should really set you apart from the competition and help continue to grow your business.
For a Refinance, the benefits are similar with a Purchase, and include:
- No monthly mortgage payments
- Security of knowing that the Borrower will have a roof over their head, despite what home values do in the future
- Use additional cash to make home upgrades and repairs, take a vacation, pay for health care, or make additional personal or real estate investments.
Opportunity for Real Estate Professionals:
A borrower doing a Refinance Reverse Mortgage on their Primary Residence, can also be a future client for you – for other real estate purchases!
One example of how powerful the Refinance Reverse Mortgage can be, is to purchase investment property, with the proceeds. The potential rental income and the potential increased equity on the investment property purchased – combined with no mortgage payments – is a powerful way to increase wealth and financial security.
