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Reverse Mortgages for Purchase as wonderful as they appear to be!!!

By
Services for Real Estate Pros with Bowers Insurance Group

Well, January 2009 is here now, and the good old bankers are allowing those who "age" qualify to use a reverse mortgage for home purchase.  A lot of people have been waiting for this program and now that it's here, they have suffered a rude awakening. 

I have a 70 year old client, who is trying to purchase a home for $65,000.00.  The home appraises for $150,000.00, and since she is on a fixed income, we figured she could make this work.  UNFORTUNATELY, I guess I should not have assumed the the HECM for purchase would work the same was as a regular HECM.  The big surprise is the loan amount is based off of the sales price, and not the purchase price.  Due to her age, she would qualify for 60 percent LTV, and the seller is not allowed to pay any closing costs. 

Just in case anyone else was thinking that this would help out some senior clients, make sure that have a boat load of cash they are willing to invest.