While attending RainCamp yesterday in San Diego, I received a call from a woman who wanted information on how a Reverse Mortgage for Home Purchase would work for her mom. Her dad had died within the past year and now the daughter wanted mom to live closer to her in North San Diego County. The large family home had been sold and mom had around $250,000 in cash available to put into a new "senior friendly home".
Her mother is going to turn 65 within the next few months and wants to be in place before Christmas. I did a quick calculation for her off the top of my head and indicated that she could purchase a home for around $560,000 with $250,000 (44%) as an approximate down payment.
The daughter then asked me what the downside of this kind of loan is. I told her that the biggest negative point of this FHA insured loan is that she would not be inheriting quite as much money as she might have because her mom would be making no monthly payments. She asked what the interest rate was and I told her that we're now offering a fixed rate of 5.49% and that the Government tacks on an additional 0.5% for the ongoing Mortgage Insurance Premium (MIP).
She asked if there is any more information available on the Internet and I suggested that she looks at my older site still on the network at www.reversemortgageforhomepurchase.com or on my corporate site at www.homeloans.com/ken-keranen. There are a lot of articles on the net regarding Reverse Mortgages but few that look at the possibility of using the program to purchase a new retirement home. The question and answer site regarding purchase at HUD is http://www.hud.gov/offices/hsg/sfh/hecm/faqs_hecm.cfm.
Mother and daughter are going to talk it over this weekend and call me with further questions. The daughter was thrilled that she might be able to get mom to move closer to her without moving into her home.
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