Did you know that at the age of 62 you can buy a home and have NO monthly mortgage payment? Did you know that at the age of 62 you can get a reverse mortgage and actually make money off of interest? Yep....you make money and make NO monthly payments. We had the lovely and very knowledgeable Laurie MacNaughton from Southern Trust Mortgage share these little nuggets of gold with us yesterday (another reason why I love EXIT...provides constant training and education).
We all know about reverse mortgages either through your late night info commercial or the bankers who prey on those who are in need. Kind of scary....right? Reverse mortgages are similar to a Home Equity Line of Credit except you have NO monthly payment. Your home will be given a value and typically you can borrow between 50-70% of the current value. Don't worry if you still owe on your home...this may still work for you. You are charged a monthly interest rate on what you use....BUT what you don't use you you actually MAKE money on. Remember you do not make any monthly payments. When the last person on title leaves the house (sell, move or leave this world) then the loan amount plus interest is taken from the sale of your home. Any left over proceeds will go to those you have appointed. Wait, what if the value of your home decreases and is worth less than what you owe. No worries...this is a federally insured loan and the bank will take what it can get. You or your heirs will not be responsible for the remaining balance.
Now how you can own a home with NO monthly mortgage payment?? This is called a reverse purchase. This allows for homeowners to have access to their cash instead of it being tied up in their home. A few requirements: one person who is one the title must be 62 years of age and you need to expect to bring upwards of 50% of the purchase price to the table. This is considered the down payment. The down payment will vary based on your age. Typically the older you are the lower the down payment. If you qualify and have the down payment then you will be able to purchase a home and have no monthly mortgage. Similar to the reverse mortgage repayment system....the bank will take the original loan amount plus interest from the sale of your home when the last person on title moves or leaves this world. Again, any excess proceeds will to your heirs. If your home decreases in value then they will take what they can from the sale. If your family would like to keep the home then they will need to pay off the loan.
Author:Dana McGushin Phone: 540-538-4503 Dated: February 1st 2017 Views: 469 About Dana: Hello! My name is Dana McGushin and I have been working at EXIT for about a year and half now. I fe...
View our latest blog posts in your RSS reader. Click here to access.
In July 2010, Mike and Ellen Butters opened the doors of EXIT Cornerstone Realty. As owners of EXIT Cornerstone Realty, Mike and Ellen focus on forming highly educated and trained agents to serve you, our valued client. Whether you're a first-time home buyer, experienced investor, or homeowner facing mortgage problems, EXIT Cornerstone's superior agents will exceed your expectations and provide you with the full-time service you expect. For more information call us at 540-825-9898.
To Buy or Not to BuyI would say as a realtor, the question I am asked
"John was great to work with. Very informed and professional. I told him what my husband and I were looking for in a house, and he found our dream home! We had a great experience working with John and highly recommend him to others."