Purchase reverse mortgages are becoming more popular as people try to find ways to increase their income. What exactly is a purchase reverse mortgage? It is simply annuity or lump sum payments from an approved lender that pays you for the equity value of your home. There are certain rules and regulations one must meet before qualification, but it is another way to increase your standard of living no matter what type of home you own.
Home Qualifications
What types of homes qualify for a purchase reverse mortgage? One that does not have any additional liens or loans against it. If your home is in excellent condition you can expect to receive the maximum equity value. If any major repairs need to be made it will decrease the value that you can receive. If the house is in poor condition it may not qualify at all. These loans are all backed by HUD.
Minimum requirements
The minimum age to participate in a purchase reverse mortgage is 62. You still have the same procedures as a normal mortgage ie; closing costs, origination fees, and interest. However, these can be deducted from your income taxes. You will be required to attend classes to ensure that you understand the process of a reverse mortgage. The fees vary by lender for the classes that are required. You don’t make any payments to the lender for your reverse mortgage.
Reverse Mortgage Length
There is no definite time limit for a purchase reverse mortgage for your home. You are allowed to stay in the house until you die. This can be a very long time. The loan ends when you die, move, or choose to get a new loan. If you should die before the entire equity has been paid out the balance can be paid to your heirs or they are allowed to pay it back to get ownership of the house.
You can use a purchase reverse mortgage for any home that meets HUD’s requirements. You don’t have the hassle of downgrading or trying to sell the home. It is an excellent way for seniors to create an additional revenue stream for their retirement.
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