By Admin on Aug 26, 2010 in Financial Services
Hi I’m 19 years old and don’t know much about real estate laws.
I heard about a reverse mortgage from my parents and decided it would be a good idea to to this if not prohibited by law.
Our house is valued at 650k. Lets say the government gives us 200k for the reverse mortgage (can you get a lump sum of money?) and the interest on the money is ,000 a year. So after ten years you owe 260k on the 200k. But what if you use the 200k to purchase real estate and rent it out for say 00 a month, which is realistic in NYC. So in on year you make 000 from the renters.
So the interest on the money you borrowed is 6,000 a year and you are making 18,000 from renters, so you are making 000 a year to do nothing??
That seems too good to be true — is my idea possible?
I have read from reputable online sites that a lump sum IS possible, but not common.
Are you sure it has to be small monthly payments??
In order to be eligible for a reverse mortgage you must be a minimum of 62 years of age, therefore at 19 years of age you would not be eligible. A reverse mortgage is a FHA backed mortgage. I am sure once you complete the purpose of the loan section one of the options would not be to invest the proceeds from a reverse mortgage into investment properties. The FHA is not geared to make individuals wealthy.
On a reverse mortgage the applicant may opt to get monthly payments or one lump payment. There might be a limit as to the dollar amount for each applicant.
You may do the same thing with a refinance of your property. You must have the equity in the property to be able to refinance it. Also you must be qualified to refinance with the proper credit report and credit scores. Once the loan close you may invest the proceeds of the loan into what ever you would like, pay off debts, make major purchases, and invest in real estate. These are all viable reasons to refinance your home.
A reverse mortgage is not geared for this type activity.
I hope this has been of some benefit to you, good luck.
"FIGHT ON"
loanmasterone | Aug 26, 2010 | Reply
A reverse mortgage is NOT a lump sum. You get a small amount each month, equal to about one normal mortgage payment.
falsifiable | Aug 26, 2010 | Reply
You also have to be over the age of 62 in order to get a reverse mortgage.
reenzz | Aug 26, 2010 | Reply