By Admin on Sep 4, 2010 in Financial Services
The home was recently appraised for 110k. I’m selling to an acquaintance for 60K (because of a prior real estate deal with him). He wants to get a reverse mortgage written to pay me off and start receiving equity payments on the balance. I think he has to get a standard mortgage first. Anyone ever hear of a simultaneous reverse mortgage/purchase?
Well he has to pay off what he owes me on the house then he can do whatever he wants. He justs wants to structure his loan to get a reverse mortgage for himself at the same time as I get paid off. He will have approx. 50k equity after he pays me.
Can he qualify? Quoting my source: "To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are further required to receive consumer information from an approved HECM counselor prior to obtaining the loan."
From that, I would think he can’t do that.
mimisnan | Sep 4, 2010 | Reply
It doesn’t work that way. You need a good real estate lawyer to see what your options are.
reenzz | Sep 4, 2010 | Reply
This has been, up to now, very difficult to do. However, this is changing. One thing to remember is that he needs to be over a certain age to be eligible for a reverse mortgage. I do not know what you mean by "receiving equity payments on the balance". In case the link does not work, this is an article on this subject in the NY Times from June 28, 2009.
MadMan | Sep 4, 2010 | Reply
You can only get a reverse mortgage in a home that you own and have equity in. Also, I believe you have to be retirement age.
Califrich | Sep 4, 2010 | Reply