Not too many people are aware of the fact, that a Reverse loan can be used to purchase a home. I have shared this information with many Realtors and yet they continue to not see what a great business opportunity this could be for them, particularly if they have a large client base they have established over many years.
The advantage of using a Reverse loan over a traditional one, makes it much easier to qualify for financing. With a Reverse loan, income is not documented and FICO scores are not considered and they are not obligated to make mortgage payments.
As long as the applicant is at least age 62, will occupy the property and the funds for the down payment on the new property can be documented, they are as good as “approved”.
I am going to share an article over several consecutive posts about how one couple purchase a “second” home by using the funds from a Reverse loan that they acquired on their primary residence. A clever way to buy that “vacation” property.
10/30/13 Reverse mortgage strategy can open door to second home – Spokesman.com – Oct. 20, 2013
Tom Kelly
Reverse mortgage strategy can open door to second home
“A reverse mortgage must be made against a primary residence, but the loan can absolutely be used to help purchase a second home.
While the proceeds of a reverse mortgage typically help seniors to “age in place” by making their home more comfortable for their retirement years, there are no limitations on how reverse funds can be used.
For example, the Caseys were seeking to lower their monthly mortgage payment on their primary home so that they could afford the monthly payments on a recreational cabin.
Instead of cashing other assets, paying the capital gain tax and plunking down the net amount as the cabin’s down payment, the couple took out a reverse mortgage, which accomplished the same goal.”
To Be Continued.