buying a second home.
The Motley Fool and Reverse Mortgages
Just a few days ago, The Motley Fool published a really cool article about their 5 reasons for using a Reverse loan.
It’s a fun article to read and it’s positive and upbeat. As a Reverse loan consultant, even I hadn’t thought of some of the reasons they came up with on why “one” should consider using funds from a Reverse loan, other than the usual ones that we talk about.
Here is a short version of it that was published in Reverse Loan Daily but I am also going to provide the link to Motley Fool’s website for the entire article.
5 Reasons To Get A Reverse Mortgage Now
Posted By Cassandra Dowell On February 18, 2015 @ 5:54 pm In News,Reverse Mortgage | No Comments
The ability to purchase a second home and retire early are two of the top five reasons consumers should consider a reverse mortgage “right now,” according to a recent The Motley Fool article [1].
“We’re all worried about our retirement,” writes Buck Wargo. “But many of us have an ace in the hole to turn to help fill in the gaps of our retirement and help us envision the dreams that we have once we stop working: A reverse mortgage.”
Other reasons to get a reverse mortgage now are to start a new career, travel and for peace of mind, Wargo says.
“The reverse mortgage is such a realistic vehicle for a lot of people,” he says, noting that it can offer a line of credit that grows over time and is available when needed.
For example, if someone has a stroke or is diagnosed with dementia, the reverse mortgage can be leveraged when unexpected financial hardships occur.
“Not everyone understands what a reverse mortgage actually is and there is a lot of misinformation out there, even in otherwise reputable and reliable media sources,” he says. “It’s only a mortgage that has the most flexible repayment terms there are. You can keep on making your mortgage payments for now, but you know if you lose your job, your health or you have to stop making payments, you aren’t in danger of going into foreclosure.”
Using a Reverse Loan to Buy a Home
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.