Buying a Home with Reverse Mortgage WAS a Great Deal
I was pleasantly surprised in November to see two things: One was a HUD mortgagee letter stating they would allow home purchases with a reverse mortgage.
Prior to this notice, using the reverse mortgage as a means to refinance was the only option seniors had.
Now they can actually use the reverse like a forward mortgage. The difference being they don't make payments. Certainly a delight to many seniors.
The second great thing I read nearly took me off my seat; it was how they would figure the loan. The appraised value of the home would be the factor detemining the actual loan amount, not the actual sale price.
As it stands for reverse mortgage refinances, there are several different things the banks look at when determining loan amount, but the value of the home is number one.
It was identical when a senior uses the reverse loan for the purpose of buying of a house. The difference to realize is when you get a reverse loan to actually buy a house, it is determined by the least of the cost and the worth.
For a reverse mortgage purchase to be based upon value only sounded almost too good to be true.
Say the loan was just based on value alone. If that were so, and a senior discovers a steal of a house running at forty percent below and nabs it, at closing time, hypothetically the borrower would owe nothing.
The Dept. of Housing and Urban Development doesn't just give things away. They arent considered strict by any means, but they want to make sure that there is a down payment. The senior must give something in order to get something.
Wouldn't you know it; HUD has come around to this fact. The rule that was so good, is now gone. HUD reverted back to the conservative policy.
It's interesting HUD takes seemingly forever to put out their mortgagee letters to us lenders. You'd think they have teams of lawyers working day and night making sure the thing is right the first time.
Not so, this particular letter was out no more than two months before revision.
Reverse mortgage loans used for purchases are now based upon the sale price or appraised value, whichever is lower.
Prior to this notice, using the reverse mortgage as a means to refinance was the only option seniors had.
Now they can actually use the reverse like a forward mortgage. The difference being they don't make payments. Certainly a delight to many seniors.
The second great thing I read nearly took me off my seat; it was how they would figure the loan. The appraised value of the home would be the factor detemining the actual loan amount, not the actual sale price.
As it stands for reverse mortgage refinances, there are several different things the banks look at when determining loan amount, but the value of the home is number one.
It was identical when a senior uses the reverse loan for the purpose of buying of a house. The difference to realize is when you get a reverse loan to actually buy a house, it is determined by the least of the cost and the worth.
For a reverse mortgage purchase to be based upon value only sounded almost too good to be true.
Say the loan was just based on value alone. If that were so, and a senior discovers a steal of a house running at forty percent below and nabs it, at closing time, hypothetically the borrower would owe nothing.
The Dept. of Housing and Urban Development doesn't just give things away. They arent considered strict by any means, but they want to make sure that there is a down payment. The senior must give something in order to get something.
Wouldn't you know it; HUD has come around to this fact. The rule that was so good, is now gone. HUD reverted back to the conservative policy.
It's interesting HUD takes seemingly forever to put out their mortgagee letters to us lenders. You'd think they have teams of lawyers working day and night making sure the thing is right the first time.
Not so, this particular letter was out no more than two months before revision.
Reverse mortgage loans used for purchases are now based upon the sale price or appraised value, whichever is lower.
posted by Debt Consolidation Loan at
5:41 PM
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