![]() ![]() The new home can't be a vacation home or an investment property. You enter into a contract to buy your home, pay a down payment, and then finance the balance of the purchase with the reverse mortgage rather than paying cash or using a first-lien mortgage. An HECM for purchase can be used to buy a new home for your primary residence. "On the other hand, some properties do not qualify for an HECM reverse mortgage, like a condominium that doesn't meet the FHA standards." "Proprietary loans are not available in every area," Bell points out. The right reverse mortgage option depends on which programs you qualify for. This kind of loan can exceed HECM loan limits, so this can be a good option if you have a high-value property. They have fewer restrictions, and the lender could loosen eligibility requirements, such as eliminating the financial review with a counselor from the Department of Housing and Urban Development. Proprietary reverse mortgages are similar to HECMs, but they do not offer a government guarantee. ![]() Bell, CEO of the National Reverse Mortgage Lenders Association. HECMs make sense for most properties valued at less than $1 million, says Peter H. The FHA limits the origination and servicing fees charged by reverse mortgage lenders. You will pay a mortgage insurance premium, but it can be financed into the cost of your loan. If the amount you owe from the reverse mortgage grows to exceed the home value, the FHA will assume most or all of the loss. government through the Federal Housing Administration. The home equity conversion mortgage is the most common type of reverse mortgage funding, and it is available to qualified borrowers who are at least 62 years old with homes that are paid off or have low mortgage balances. ![]()
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