subject: Purchasing A Florida Home With A Non-recourse Loan [print this page] Seniors around the nation have new financing options for purchasing a home. By using a reverse mortgage to purchase a home, older borrowers can use existing cash savings or the money from the sale of their home to purchase a new home in Florida and around the country. The remaining purchase price of the home can be borrowed by taking out a reverse mortgage. This incredible loan eliminates future monthly mortgage payments.
Its incredibly easy for borrowers to use a reverse mortgage to purchase a new home. Seniors can use these loans for many purposes. Whether they use the loan proceeds to buy a larger home, a smaller home, or simply to relocate, the loan is incredibly easy to obtain. With this flexible financing tool, the uses of the proceeds are only limited by the borrower's imagination.
The process of purchasing a new home with a reverse mortgage is just like buying a home with a regular mortgage. However, the eligibility requirements are much easier. The amount a borrower is eligible to take out with a reverse mortgage for purchase is based on several factors. First the bank will look at the value of the property the borrower intends to purchase. The amount a senior can borrower will be determined using the lesser of the appraised value of the property, the purchase price or the FHA maximum amounts for that area. The amount that can be borrowed is based upon the youngest borrowers age, the value of the home and the current interest rates on the loan. Getting a home appraised and inspected is identical to any other financing process.
Reverse123In order for a home to be eligible for a HECM for Purchase reverse mortgage, the property only needs to meet standard FHA eligibility requirements. Single-family homes, multi-unit properties and certain condominiums are eligible. If the purchase property is new construction, the property must be completed by closing and ready for immediate occupancy. Once the loan closes, the borrower must occupy the property within 60 days of closing.
Reverse mortgages are no more difficult to obtain than regular mortgages. In fact, in many ways they are much simpler. Borrowers do not need to meet any particular credit or income eligibility since there is no obligation to repay the loan as long as the borrowers continue to live in the home. They must continue to keep their taxes and homeowners insurance up to date, however. Another great benefit of the reverse mortgage is the non-recourse nature of the loan. This aspect of the loan means that a person can never owe more than their home is worth even if the home drops in value drastically.
Reverse mortgages will definitely grow in number over the coming decades. As more seniors reach retirement age and look to move into their retirement homes, expect to see more and more homes purchased with these loans. Financing a new home with a reverse mortgage and eliminating all monthly mortgage payments is certainly an attractive alternative for many on a limited income.
