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FAQ for Customers

1. What is a Purchase Reverse Mortgage?

A reverse mortgage for purchase allows seniors ages 62 and older to purchase a primary residence using the loan proceeds from a HECM (Home Equity Conversion Mortgage).

2. Why use a HECM for purchase vs. a traditional mortgage?

One of the greatest benefits of a reverse mortgage is that monthly payments are not required as long as the home is occupied as a primary residence, whereas a traditional mortgage requires monthly payments. Additionally, a reverse mortgage does not have the strict credit and income underwriting guidelines that traditional mortgages have. It is important to note that even though the borrower is not making monthly payments with the reverse, the borrower absolutely must keep their homeowners insurance current, pay their property taxes, keep the home in good repair and pay any other costs that may be associated with the home (for example: Home Owners Association Fees).

3. Why is counseling required?

Counseling is mandatory as a safeguard to be certain that all borrowers fully understand the reverse mortgage program. Also, during the counseling session, the counselor will review options other than a reverse mortgage that may be beneficial to the senior.

4. Can gifts be used for down payment?

Yes. Gift funds from family members are acceptable forms of down payment.

5. What are acceptable sources for down payment?

Prospective mortgagors must use their own money (money obtained from sale of assets, and/or sale of current home) for the required monetary investment. Examples include:

•Checking / Savings account

•Sale of real estate including former home

•Gift from family

•Sale of assets such as  investments
 
6. How will assets used for down payment be verified?

The three most recent, consecutive original bank statements, belonging to the borrower, which cover the most recent three-month period and previous month’s balance. (Note: must provide all pages of the bank statement even if blank). If there is a large increase in an account, or the account was opened recently, a credible explanation of the source of those funds is required.

7. How much down payment is required?

The amount of down payment required is based on several factors including the age of the youngest homeowner, the appraised value or max claim amount of the property and current interest rates. It's best to use our reverse mortgage calculator or contact us directly to determine the required investment amount.  INSERT CALCULATOR LINK (use the RM4P calculator)

  

Reverse Mortgage for Purchase Calculator

Click here to see how much your down payment would be!

Tim Linger
321-356-9229
 
934 North Magnolia Ave, Suite 306
Orlando, Florida 32825
TLinger@S1L.com

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