While we love the summer season here in Washington State, winters can be a drag. Wouldn’t it be nice to have a second home in a warmer area like Phoenix or Palm Desert? It may be possible using a reverse mortgage (HECM) to finance the purchase. This program is available to home buyers age 62 or older who will live in the home as a primary residence. A HECM never requires a payment while you occupy the home. You only pay the property tax, insurance and any maintenance. You can use it to build a new home, downsize to a more suitable home, or relocate closer to friends or family, for instance. You also could use it on your current home to pull out equity for the purchase of a second home.
Most reverse mortgages are federally insured through the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) Program. Lenders must follow the guidelines prescribed by HUD. The amount of equity available depends on the age of the youngest borrower, the interest rate, and any current loans on the property. Many participants establish a line of credit rather than fixed payments or a lump sum payout, and as long as you have unused funds in your credit line, those funds are guaranteed to grow. No payments are required and you can stay in the home as long as you pay the taxes, insurance and maintenance. You can pay these cost from your home equity.
For example, suppose you would like to buy a 2000 sq ft single-level home in Surprise, Arizona, in a seniors-oriented community for around $280,000. At age 66 of the youngest of you, only about $156,000 is needed to purchase with a reverse mortgage. There would then be no required payments on the home. Just reside there for six months and a day to establish it as your primary residence and spend the rest of the year in wonderful Washington.
The house shown is currently (Dec 14, 2017) for sale. See it at http://bit.ly/2BquHJo
When you would like a more detailed discussion about these opportunities, Call Duncan at 253-709-5895 and we can get together for coffee.