Reverse Mortgage: Buying with no Payments
August 20, 2009 - (RealEstateRama) — Rita Geraldson woke up every morning, for years, wishing she could move - closer to her daughter and grandchildren.
her problem: Moving to the home she wanted meant starting mortgage payments again – something she just wasn’t willing to do.
Then she read an article. It actually changed her life. “I didn’t believe it a first,” she said. “I had heard about people getting a reverse mortgage, but I never knew you could use them to buy a house.” The article explained that just like a refinance, buyers could use a reverse mortgage to purchase a home.
Within four months, Rita was entertaining her grandchildren at her new home – a home with NO house payments.
As with Rita, many retirees would like to relocate, but they don’t want to take on a mortgage payment. If they can’t pay all cash for the home they want to live in, they have to borrow money and make payments - something people in retirement don’t want to be burdened with.
Using a reverse mortgage to purchase, they don’t have to pay all cash for the home, and they don’t have to make payments, as long as they live in the house.
What are the particulars of the reverse mortgage to purchase program?
- The same qualifying applies – no credit requirements and no income requirements. The only difference is that the buyer does have to verify that they have the down payment.
- Just like with a regular reverse mortgage, the buyer has to occupy the property as their main residence.
- The same safeguards apply – as long as you live in the home, you don’t have to make any payments. All you have to pay are the taxes, insurance, and maintenance of the property.
To find out how much you can qualify for, all that’s needed is your date of birth, the zip code where you’re buying, and the possible purchase price of the property.
The program, released in October of 2008, is rapidly gaining popularity.
Even those who can afford to pay all cash are considering this option. By not using all their cash, they’re able to keep other options open.
Fred Murada, a retiree who just purchased on Oxnard, CA, agrees. “I’ve got investments, and other goals. I don’t want all my money tied up in a house – especially at this point in life.”
Aboout Joffrey Long
Joffrey Long is president of Southwest Bancorp, a reverse Mortgage and FHA lender. Joffrey has been working with homeowner financing for the past 34 years and has worked extensively in the area of reverse mortgages. He can be reached at (818)366-5200.
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