Great news for Realtors!

The recent bill that passed which raised the county limits of FHA loans also includes a provision allowing seniors, 62 and older to combine the purchase of a home with a reverse mortgage.

For those of you that do not know how it works, it goes like this:

Say a 70-year old buyer sold their previous home and has $100K to put down on a home. Let's say they are interested in a 200K property. They very well may qualify for a reverse mortgage which will alleviate any future mortgage payments. In some respects, it would be the equivalent of purchasing a home for 1/2 price. No more payments for the rest of their life! ( other than taxes and homeowners insurance)

Scenario #2-the same buyer doesn't really want to take on much of a mortgage so they are instead shopping for a $150K home in order to keep those payments low. Again, instead of financing anything, they could now qualify for a higher-priced home ($200K)-sounds better to you as an agent and in all reality, would probably make the client happier!

One more example- say the same buyer has the full amount to buy a $200K home;cash purchase. Why would they?? They can now put $100K down along with the reverse mortgage, and not make one mortgage payment! They then have $100K to do with as they please-put in the bank as a nice next egg, invest, buy long-term health care coverage, travel, etc. They can truly enjoy the golden years.

As with all of the examples above, they have alleviated the costs of 2 transactions which would save them 1000s of dollars.

I will say these transactions will not be simple but then again, neither are short sales or modifications and we've all become more familiar with them in recent months. It will be imperative that you do your homework and learn this program in order to accommodate your client. In addition, you must work with a lender that knows the program inside and out or the deal will surely fall through. Oh, by the way, many Reverse Mortgages are due to referrals so keep that in mind.

I have performed close to 200 Reverse Mortgage closings in the last 14 months. I will gladly help any of you that would like more information or assistance with clients that may be a fit for this program.

Regards,

Lora