REVERSE MORTGAGES - WORTH ANOTHER LOOK?

You need to take a serious look at the FHA reverse mortgage program.  I have always loved this idea for seniors who are on a fixed income.  However in the past, the closing costs were nearly twice what they are now, which was a deal breaker for most.  Also, in my mind there hadn’t been enough time to see how this program would pan out in the end sale and there were concerns about what would happen if there was a shortfall in equity.    



TAX FREE MONTHLY INCOME FOREVER!


After doing a lot of research for a senior relative and spending hours with a local Reverse Mortgage Expert, I came away pleasantly surprised.  Nearly everyone can benefit from this program.  It may save some senior homeowners from foreclosure, it can fund capital improvement such as a roof or air conditioning and/or it may create a sorely needed source of additional monthly income.  It may even be a pretty neat investment opportunity.   



MIP PAYS ANY SHORTFALL!

This is what clinched it for me.  This program requires Mortgage Insurance Premium (MIP) which serves two important functions.  It protects the homeowner from the lender going under (remember, the lender is paying you) and it protects the homeowner in the event that the home is worth less than the mortgage when the sale takes place.

Here’s how it works:  Based on your age and the value of the home, it is determined how much initially you qualify for.  The funds used and accumulated interest is added to the mortgage balance.   Rest assured, the equity position is never reviewed again until sale.  The balance is due 12 months after the last of the owner(s) moves out or at the time of the eventual sale.  If the balance of funds drawn is more than the eventual sale price, the MIP pays the difference.  If the property is worth more, the net profit after your customary selling expenses is yours or your heirs.  It’s a win-win.



REVERSE MORTGAGE FOR PURCHASE


Here’s a rough example, if you qualify:  Instead of paying cash for a new $200,000 home, you can keep $100,000 in the bank, take a $100,000 reverse mortgage and let the equity feed the payment.  Or you can put that $200,000 down on a $400,000 home and have zero payments.   Have you always wanted to live on the wide water or maybe a beachfront condo?  Purchasing over twice your current value with no monthly payments is an incredible investment vehicle in this devalued market.  The current maximum is $625,000 for purchase price.

While I used 50% in the above scenarios, the mortgage amount or percentage of value allowed and/or monthly income is based on your property value and your age.  There are no income, credit or employment requirements.

If you have questions about buying, selling or saving your home, feel free to call me….I can be reached at RE/MAX of Stuart, 729 S. Federal Hwy, Stuart, FL Direct Line 772-214-4420 or at my website http://www.sarahsellsflorida.com

Sarah Pietkivitch is a trained Seniors Real Estate Specialist (SRES) and a Broker Associate for RE/MAX of Stuart. She holds a degree in Real Estate and is an Accredited Buyer Representative Manager (ABRM), Certified Real Estate Specialist (CRS), Graduate Realtor Institute (GRI) and Certified Distressed Property Expert (CDPE). She is a member of the Employee Relocation Council and the Certified Luxury Home Marketing Specialist Institute. She has been a top producing Real Estate Broker and/or Mortgage Lender for nearly 30 years. Her resume includes Mortgage Lending Manager for a 20,000 member Credit Union and the Broker Owner of a RE/MAX Franchise in Wisconsin. She was elected to the Executive Council of RE/MAX North Central and is a member of the coveted RE/MAX Hall of Fame, amongst other awards and accreditations. In her career, Sarah has personally sold and/or helped people with their real estate needs spanning over 1,000 homes.