A reverse mortgage is a mortgage that enables qualified homeowners to borrow against the equity of their primary residence. Homeowners looking to buy a house with a reverse mortgage much meet a handful of qualifications to purchase a new home with a reverse mortgage. With this, repayment of the mortgage is unnecessary until the residence is sold. If you are a retiree planning to purchase a home in the future, keep in mind these crucial considerations of qualifying for a reverse mortgage.
Qualifying for a Reverse Mortgage
These mortgages are often used to assist retirees with remaining in their homes as they age. However, potential borrowers must meet a series of standards in order to qualify for a reverse mortgage. In keeping this in mind, a potential reverse mortgage borrower must meet the following qualifications:
- Minimum age of 62
- Must use the newly purchased home as a primary residence
- Must pay property taxes, insurance, HOA dues, or additional property maintenance costs
- Must not have any federal debt obligations
If you qualify for a reverse mortgage, the amount that you can borrow is dependent upon your age as the borrower and the age of your spouse. It is also contingent upon your current interest rates and your home value based on an appraisal, as well as your original mortgage insurance premium.
Why Buy with a Reverse Mortgage?
In a reverse mortgage, there are no required monthly payments. With this, accumulated interest must be repaid in addition to the original amount borrowed once the house is sold, or, if the borrower dies or moves out for 12 months or more. With no monthly payments required, a reverse mortgage allows you to purchase a new home without draining your retirement savings. A reverse mortgage will also provide you with an opportunity to buy a home that better suits your needs without completely affecting your retirement savings over time.
Trust Jack Cooper Law for Your Legal and Real Estate Needs
If you are looking to purchase a new home, trust Jack Cooper Law for affordable, professional, and accurate legal and real estate assistance. Let our excellent team of experienced Maryland real estate attorneys provide you with expert counsel and information. In working with Jack Cooper Law, you will have access to our excellent industry contacts, from trusted and reliable lenders to home inspectors, contractors, and service providers throughout your selling process. No matter where you are located in Maryland, our team is ready to work with you! Call us at 410-465-5822!