Reverse mortgages are seen as a way for seniors to tap into their current homes as a source of income. By drawing from the equity they already have, they can pay off bills, make improvements to their current residence in Daly City California 94014, or even take a well-earned vacation. There is one option that most do not even consider: using a reverse mortgage for the purchase of a newer property.
Understanding a Home Equity Conversion Mortgage
In order to see how using a reverse mortgage for purchase of a newer property works, you first must understand the Home Equity Conversion Mortgage (HECM). The HECM is still relatively new, but it provides a way for those who are 62 years or older to borrow against the value of the home. With approval, the borrower gains access to funds without having to make monthly payments. Repayment of the loan does not occur until the borrower either passes away or sells the property.
This loan is not an option for everyone. In fact, the guidelines stipulate a minimum age of 62 years old. The borrower must also either own their home outright or have a large amount of equity built up in Daly City California 94014.
Using Reverse Mortgage for Purchase
For some older Americans, the idea of living closer to family members is ideal, but they do not necessarily want to give up their existing home. If this is the case, they may apply for a reverse mortgage. The borrower must occupy this second home for a set portion of the calendar, and the original residence, which the loan is against, must be the borrower’s primary residence in Daly City California 94014
When using a reverse mortgage for purchase, there are some limitations. For example, this type of loan only covers 47 to 52 percent of the purchase price. It is the borrower’s responsibility to make up the difference. This money can come from a retirement account, savings, or a gift. The actual amount borrowed depends on the age of the youngest borrower, current interest rate, mortgage insurance premium, and the home’s value at appraisal.
Additionally, only certain types of residences qualify for a reverse mortgage. These include single-family homes and two to four unit homes where the borrower occupies one of the units. For condominiums, the U.S. Department of Housing and Urban Development requires preapproval. In addition, manufactured homes must also have FHA preapproval. The borrower must also obtain a certificate of occupancy for any new construction.
A reverse mortgage is a great way for seniors to get a second home closer to family. As with a traditional HECM, there are no monthly payments due. A single, balloon payment, is due at the sale of the home, when the last borrower moves out or passes away. This payment is a total of the principle plus interest. If the home sells for more than this amount, the borrower, heirs, or the estate retains the remaining equity. Should the home appraise and sell for less than the amount owed, there is a guarantee of no personal liability. Lenders are insured against this type of loss in Daly City California 94014.
Surrounding Areas In California
Daly City Information
Video: Mortgages in Daly City CA
Redwood City, California detailed profile ... Latest news from Redwood City, CA collected exclusively by city-data.com from local newspapers, TV, and radio stations
Richmond (/ ˈ r ɪ tʃ m ə n d / RICH-mənd) is a city in western Contra Costa County, California, United States. The city was incorporated on August 7, 1905 ...
Zillow has 29 homes for sale in San Bruno CA. View listing photos, review sales history, and use our detailed real estate filters to find the perfect place.
Search a map of all California cities with a complete list of all cities and towns with Livability Scores.
Zillow has 44 homes for sale in South San Francisco CA. View listing photos, review sales history, and use our detailed real estate filters to find the perfect place.
Join the discussion! This forum covers San Francisco, CA local community news, events for your calendar, and updates from colleges, churches, sports, and ...
Measure Subject Author Status; ABX2-1 Developmental services: Medi-Cal: funding. Thurmond: Chaptered: ABX2-7 Smoking in the workplace. Mark Stone: Chaptered
Go back to Afghanistan Iraq dude: Spencer Bottomley was named in another brutality case, Derrick Lamoris Shields vs. City of Vallejo, for an incident on ...
According to our research of California and other state lists there were 4 registered sex offenders living in Millbrae, California as of November 19, 2017. The ratio ...
Home Mortgage Rates in California. Palm trees, beaches and more than 300 sunny days per year on average - who wouldn’t want to live in the Golden State?