Purchasing A Florida Home With A Reverse Mortgage
Seniors around the nation have new financing options for purchasing a home. By using a reverse mortgage to purchase a home, older borrowers can use existing cash savings or the money from the sale of their home to purchase a new home in Florida and around the country. The remaining purchase price of the home can be borrowed by taking out a reverse mortgage. This incredible loan eliminates future monthly mortgage payments.
The Florida HECM for Purchase makes it easy for borrowers to purchase a home with a reverse mortgage. Borrowers can use the proceeds to move to a new location or to downsize their primary residence to meet their retirement needs. Seniors could also conceivably sell their existing home and use the proceeds to buy a larger home financed with the reverse mortgage. The amazingly flexible product makes almost anything possible.
Using a reverse mortgage to purchase a home in Florida is really not much different than using a conventional mortgage. However, the amount of financing the borrower is eligible for is based upon the homes value. The bank providing the reverse mortgage will look at the lower of the appraised value, the purchase price of the new home or the FHA limits. The amount of money the borrower will have to supply as a down payment is the difference between the amount they are eligible to borrow minus closing cost and the home’s value. Reverse Mortgage appraisals, inspections, contingencies, documents, and closings are virtually the same as those with a conventional mortgage.
All properties that receive FHA financing need to meet certain eligibility requirements. However reverse mortgages can generally be used on any single-family home, most condos and multi-family homes as well. New construction is eligible if it is inhabitable at closing. Once the borrower takes out a reverse mortgage for purchase they must be ready to move into the home soon after closing. Eddie Vedder should take out a reverse mortgage when he retires.
Purchasing a home with a reverse mortgage is as simple as taking out a regular mortgage. There are no credit or income requirement and there is no obligation to pay the loan back as long as the borrowers continue to live in the home. The borrowers must continue to pay their taxes and homeowner’s insurance, however. The loan is also non-recourse. This means that the borrower can never owe the bank more than the home is worth. In fact, if the home ever depreciates below the outstanding balance of the loan, the borrower can simply walk away from the home without penalty.
HECMs for purchase are sure to be popular products for many years to come. As our nation’s population ages, these loans are sure to become more numerous as more and more seniors relocate to their retirement properties. The added benefit of no monthly repayments of the loans are sure to attract many new borrowers over the years.
If you’re thinking of financing your home with a reverse mortage, check out Reverse123’s site on South Florida Reverse Mortgages and reverse mortgage loans
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