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QUESTION:
Funding a vacation home
I have approx $500,000 equity in my home and would like to extract approx. $125,000 to purchase an apartment/home in Florida. Since I'll have taxes and homeowner association fees to pay on the new Florida home I don't want to also have to payback principal on the $125,000 loan. Is a reverse mortgage the best way to accomplish this or is there a less expensive method...say, a permanent loan for which I need only pay interest until I sell the asset (primary home) that secures the loan. Thank you, SG
	asked by sjgking, 2/21/2008
Categories: Retirement Assets, Reverse Mortgages, Housing, Reducing Retirement Expenses, Sell/Buy a Home

ANSWERS:
	Answered by: YourReverseMortgageGuy, 02/25/08 Overall Rating: Be the first to rate it.
SG: If your goal is to purchase the apartment and not have a mortgage payment then, yes, a reverse mortgage may be the best, if not only option. A "permanent" or conventional loan, or even a home equity loan on the current property will result in a payment ... and it sounds like you're trying to avoid that. Plus, who knows if you'll qualify for the conventional loan anyways since it depends on income, credit, etc. If your goal is the least expensive route then simply locate a couple of online calculators (one for a conventional mortgage, one for a home equity, and one for a reverse) and do a side-by-side comparison. Jeff YourReverseMortgageGuy.com Login to rate this answer:
	Answered by: Tamera, 02/26/08 Overall Rating: Be the first to rate it.
I think the question here is whether or not you can afford the interest only mortgage payment for the new home. Of course, youd have to qualify for it first.But just because you can qualify for it doesnt necessarily mean you can afford it. The amount available to you in a Reverse Mortgage is going to primarily depend on your home value and the amount you owe, not how much equity you have in it, though it certainly helps. I am a reverse mortgage specialist employed by Financial Freedom. I would be happy to run an amortization schedule for you so that you can compare the two. tfield @ financialfreedom.com 877-632-7890 Tam :) Login to rate this answer: