Reverse Morgage for a new home owner. | In NewRetirement's Questions & Answers Forum

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QUESTION:
Reverse Morgage for a new home owner.
My wife and I are 66 and 67.We do not currently own a home. We have been offered a reverse mortgage on a foreclosed home. Will this mortgage work the same as if we were refinancing a home that we owned?
	asked by rocky 06, 2/10/2008
Categories: Pensions, Reverse Mortgages, Retired, Social Security

ANSWERS:
	Answered by: Editorial, 02/19/08 Overall Rating: Be the first to rate it.
I have heard of this scheme, but do not know too much about it. Typically you must have lived in a home for one year before qualifying for a Reverse Mortgage. So, I can only guess at how this scenario would work. Perhaps this strategy is that the house seller provides financing for the first year, and then the buyer (a senior) gets a Reverse Mortgage after the year to refinance the motgage and pay off the seller. No matter how it works, this is probably a slightly murky situation and you will want to be very careful to understand the contract and trust and respect the person or company making this offer. It is also important to note that congress is currently working on passing a bill that -- among other things -- would enable you to finance the purchase of a home with a Reverse Mortgage. But, again, that has not yet been passed. If you are interested in learning more, it is called the FHA Modernization Bill. Login to rate this answer:
	Answered by: Tamera, 02/26/08 Overall Rating: Be the first to rate it.
You are no longer required to live in your home for a year. That ended about two years ago. The hurdle you have is getting title in your name, as the HECM isnt yet availabe for home purchase. You can use the FNMA Homekeepr plan, but they dont lend as much as FHA. When the Modernization Act goes into place, youll be able to use HECM to purchase your home. That should occur soon. The benefits to using a reverse mortgage for purchase is that there would be no income or credit qualifying. You wouldnt make any mortgage payments for as long as you lived in the home. The drawbacks are that you will probably have to come up with more money out of your pocket then a traditional mortgage. If you can give me some details, I would be happy to run a quick scenario for you, tell you how much you could qualify for and how much you would have to come up with out of pocket at close of escrow. I am a Reverse Mortgage Specialist employed directly with Financial Freedom. I would be happy to answer any questions you might have. tfield @ financialfreedom.com 877-632-7890 Tam :) Login to rate this answer: