Buying or Selling a Home/Reverse Mortgages

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Question
Hi Dick,

I was wondering what you think of reverse mortgages?

Thanks, Dennis

Answer
Simply, Dennis, I'm for it.

There are those who reach the eligibility age have concern over their health and obligations, not least of which is a mortgage over their head. And FHA allows a HECM (Home Equity Conversion Mortgage) program that takes that obligation away while letting the house owner to continue living in their home. He/she must continue to live in the property, keep all property taxes current and maintain the condition of the property.

Technically, it is not a totally free program. The HECM program lends the amount necessary to eliminate the house owner's worry about paying back that loan . . . until they die or move out of the house. Then and only then does the FHA gets paid back. And you don't need to be concerned about your credit record. The government lends the money based exclusively on the value of the property and how long the owner is expected to live.

It starts at age 62. Depending on the value of the property that is when the house owner gets the smallest amount of funds. The older the house owner is at the time of initiating the reverse mortgage, the more the loan will be. The owner may get the loan in a lump sum, in monthly installments or a combination of the two.

And for the rest of their life they cannot deed the property to anyone else without triggering the repayment of the loan. That includes the house owner's children or relatives. And that is the crux of the matter when "the kids" object to the owner getting the loan. They realize that upon the death of their parent(s) the house must be sold by FHA to satisfy paying off the loan.

There is a procedure the owner must go through to initiate the loan. Therefore, I recommend you consult with an authorized lender to find out what the complete program is all about and what it costs up front to start the ball rolling. There is not too much difference between lenders because they must abide by the government's rules of the game. You can probably find a lender in your area by going online with "reverse mortgage lender." I wish you well.

Dick Dennis
dixiedee13@gmail.com

Buying or Selling a Home

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Dick Dennis

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With more than 41 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter, The Landed Gentry. It can also be sent to you via PDF.

Experience

Solving real estate problems for 37 years.

Organizations
National Association of Realtors

Publications
Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers

Education/Credentials
e-Pro Realtor, Certified Distressed Property Expert, Who's Who in Creative Real Estate

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