Second Reverse Mortgage LoanAsked on 5/4/2010
I have two(2) properties now. One is my home, that is where I live now. I took out a reverse mortgage loan against this property, the other has a separete conventional mortgage. My question is can I sell my present home and payout the present reverse motgage loan, move to my other property and get a new reverse mortgage loan against this property and pay out the outstanding conventional mortgage loan. If this is possible then my second question will be, Do I have to wait a certain amount of time before I can apply for the new Reverse mortgage loan? Thank You for the advice. Julio.
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70 year old from Houston, TX
The answer to your first question is yes. You can terminate your existing reverse mortgage by selling the home and using the proceeds of the sale to pay the reverse mortgage off. Assuming your second property is another residential property and that it is qualified for a reverse mortgage (not a Co-op, non-certified Condo, or mixed-use commercial), you could then declare it your primary residence and get a reverse mortgage to pay off your outstanding conventional loan. In order to do so however, you would have to make sure that the conventional mortgage was small enough to be paid off by the reverse. You can find that out here: https://www.newretirement.com/Services/Reverse_Mortgage_Calculator.aspx.
As to the second question, most companies will require that you live in the second home at least six months before they will agree to a reverse mortgage program. Some however will only require that you own it for six months, meaning you will be able to commence immediately. You can find a number of lenders in your area at the following inquiry form: https://www.newretirement.com/Services/Reverse_Mortgage_Advice.aspx?
As long as you intend on living in the second home, and you already own it, I dont see a seasoning issue (time frame in which you must live in it). You are able to sell your existing home with the RM on it, use it to pay off the mortgage balance,and immediately refi the new home with a RM. Please let me know if you have any further questions, Im happy to provide no obligation answers. Tam :)
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.