Wells Fargo is one of the first banks to roll the program out nationally.
Use a Reverse Mortgage to purchase a primary residence or pull cash out of an existing primary residence.
Examples of where a Reverse Mortgage to purchase a primary residence might have application:
1. Buyers that have some cash but not enough to buy the house they really want……..They have insufficient income to qualify for a conventional mortgage
(with it’s commensurate mortgage payments). If they obtain a reverse mortgage on the house they are buying , they have no qualification concerns since income is not part of the qualification process and there are no mortgage payments required on the reverse mortgage.
2. Buyers that cannot sell their home up north…..They want to move to Florida but either cannot qualify for a conventional mortgage on the Florida home
or don’t want to have a mortgage payment on their retirement home…….Once again, no income/ratio requirements to obtain a reverse mortgage and best of all,
there are no mortgage payments on the reverse mortgage.
Here are a few of the aspects of the reverse mortgaged program that may be particulary important to prospective users:
*** The youngest borrower needs to be age 62.
*** Reverse mortgages can only be made on a primary residence.
* The payments/proceeds from a reverse mortgage are not considered income, so they do not affect levels of social security, medicare, and/or pension benefits.
* There are no pre-payment penalties associated with paying off the reverse mortgage at any time.
* The buyers never give up title to the property.
* The buyers will never be forced to sell as long as the property remains the PRIMARY residence of at least on borrower.
* The heirs will never owe more than the property ultimately sells for in an arms length transaction,
(i.e. there is never a negative equity position passed on to the heirs).