1. Using A Reverse Mortgage To Purchase A Home
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2. A HECM (Home Equity Conversion Mortgage) is a special
type of mortgage that enables homeowners age 62 or older
to tap into the equity in their home. Unlike traditional home
loans, no repayment of the HECM loan is required until you
no longer occupy the home as your principal residence. At
that time, the lender will declare the mortgage due and
payable. What is borrowed plus interest is due to the
lender, remaining equity remains with the estate.
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3. The HECM is insured through FHA
and is a non-recourse loan.
So what does non-recourse mean?
The homeowner or their heirs will never be asked to pay
back more than the value of the home, even if the debt has
grown to be greater than the value.
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4. This sounds great for refinancing.
How does the purchase work?
The same way, the borrower will qualify between 61.9% to
77.6% LTV depending upon their age. The older you are,
the more LTV (smaller down payment) you qualify for. So
with a purchase; figure a down payment of 22.4% to
38.1%, plus closing costs.
Chances are your senior borrowers may need at least this
much of a down payment to qualify for traditional financing
to get their DTI down.
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5. Effective Mortgage Company
using IBIS (Reverse Mortgage
Software) can give your senior
prospect an immediate down It is easy, it is fast!
payment figure; all we need is
a purchase price, date of birth
and zip code!
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6. โขNo Mortgage Payment! (Taxes and Insurance payments
are required and must be maintained)
โขLeverage crucial retirement cash liquidity
โขBuy up, get more house than paying cash
โขCannot have had foreclosure, short sale, deed in lieu in
the last three years
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8. โขSFRโs, PUDs and FHA approved Condos
โขNo units, manufactured, log, dome, farm, etc.
โขNo second homes or investment properties
โขNew Construction- Not eligible until the Certificate of
Occupancy has been issued
โขAny repairs must be satisfied by the seller prior to closing
โขHome Inspection is required, new construction omitted
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9. โขNo NODโs, short sale, deed in lieu, mortgage rating past
120 days
โขNon borrowing spouse must have credit pulled to confirm
previous mortgage rating
โขAll federal debt must be satisfied
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10. โขNo loan to get our loan; business, bridge, mortgage,
retirement account, credit card, etc.
โขProceeds from the sale of a business, real-estate, etc. are
allowed. Paper trail must be documented.
โขAll funds must be seasoned for 90 days, large deposits
sourced.
โขMattress money, cashiers checks, etc. will not be allowed
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11. โขBorrowers may keep existing Real Estate
โขAll existing real estate housing expenses will be
added / buyers income (no credit for rental
income)
โLooking for 45% DTI (exceptions can be
made)
โขBorrowers will sign Verification of Occupancy and
some instance a Letter of Intent
โขMust occupy the residence within 60 days or
default under the terms of the mortgage and
foreclosure proceedings can begin
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12. No Concessions Allowed
โขNo seller, concessions
โขNo lender concession
โขNo broker concession
โขNo real-estate agent (buyer or
seller) concession
โขNo concession from any party in
the transaction before, during, or
after the loan closing
โขNo carry back financing
โขNo gift of equity
Gift funds are allowed! โ They
must be sourced
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13. 1.Home Inspection is done late โ repairs must be satisfied
by seller
2.Funds are not sourced properly with a clean paper trail
โ90 days unless from the sale of another
property, business, etc.
3.Real estate agents, sellers, and brokers attempt to work
in concessions
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