Reverse Mortgage for Purchase

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  #1  
Old 05-13-2011, 11:41 AM
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Default Reverse Mortgage for Purchase

Just wondering if anyone has obtained a HECM reverse mortgage which is used to purchase a home rather than the traditional reverse mortgage where you tap the equity in your home. Wish I didn't have to consider any type of mortgage but might be necessary for us. I realize not all mortgage companies originate the HECMs. Thanks for you info. I can always count on good answers from you guys! Thanks
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Old 05-13-2011, 11:53 AM
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you might want to call Citizens First Wholesale Mortgage, 800-477-1086, they can probably explain it better than me....gn
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Old 05-13-2011, 12:58 PM
Jim 9922 Jim 9922 is online now
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Just a couple of thoughts (and I don't know your full situation):
First, my old Pappy used to say "'don't buy something you can't afford". Thats why there are so many foreclosures, even in TV. Maybe downsize your Villages wants for awhile. Upgrade when your situation gets better.

Second, a reverse mortgage will probably deplete your old equity faster than the build up of equity in the new home. As with most reverse mortgages you will be the loser in just a few years. Housing prices and demand will probably not recover for at least 5 years in most Northern areas so if selling your old home is a problem, it will continue.

Third, consider refinancing your old home and use the cash to buy in TV. A new mortgage at today's rates is probably less than you currently pay. Most important, you will save the very high fees (tax) imposed on mortgages in FL, thus saving more money.
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Old 05-13-2011, 04:37 PM
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Quote:
Originally Posted by wendyquat View Post
Just wondering if anyone has obtained a HECM reverse mortgage which is used to purchase a home rather than the traditional reverse mortgage where you tap the equity in your home. Wish I didn't have to consider any type of mortgage but might be necessary for us. I realize not all mortgage companies originate the HECMs. Thanks for you info. I can always count on good answers from you guys! Thanks
A reverse mortgage is a FHA insured loan for borrowers age 62 or older. There is a reverse mortgage for a purchase called a HECM for purchase loan. You will still have to have a downpayment and that could be up to 50% of your sales price depending on your age and the program you select. No mortgage payments but nothing in life is free so the interest you are not paying each month will accrue on the balance. That is interest accruing on interest. The balance of the loan will increase thru the years. Are they good or bad depends on your personal situation. Get all the information and review other options as well. Closing costs on a reverse mortgage can be high, even with the new HECM Saver programs.
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Old 05-13-2011, 05:10 PM
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Please tell everybody what HECM stands for.
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Old 05-13-2011, 05:19 PM
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Please tell everybody what HECM stands for.
Home Equity Conversion Mortgage
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Old 05-13-2011, 07:38 PM
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Default Heck-um Mortgage

Thanks for your input. I have been a RE Broker and Instructor for the past 30 years so am aware that it is not for everyone. Just another option and might fit the needs of others. I was just curious if anyone around TV was using it as a financing tool.
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