Can you use a Reverse Mortgage to buy a home?

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Did you know that a Reverse Mortgage could be used to purchase a home?
Meet the Home Equity Conversion Mortgage (HECM) for Purchase. Buyers must be 62 or older to qualify. It’s a federally-insured loan. As long as you live in the home, you will never make a mortgage payment. The loan increases over time and the interest accumulates and is added to the principal balance. The balance is due when you sell, move out for 12 months or more or die.

The catch: it requires about a 50% down payment. That creates enough equity to cover the accrued interest on the loan. The down payment can come from the sale of another home, from savings or a gift from a family member.

You just can’t borrow the down payment. Most folks will use the proceeds from the sale of a home as their down payment.

Turn your Clocks Back Sunday 11/4/2018

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Daylight Saving Time ends this weekend. Don’t forget to turn your clocks back an hour this Saturday night before you go to bed.

How will you spend your extra hour?

Enjoy the weekend!

P.S. Here’s a fun idea to put that extra hour to good use: Stop by some Open Houses to see what your next dream home could look like. Just call or email me.

Is renting to buy still an option?

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Sometimes the desire to own a home is so great that renters just can’t wait, even if they don’t have a down payment to buy a home. How do they do it? Through a contract with a seller called a lease-to-own agreement.
While it’s rare to see in a seller’s market when inventory is low, there are times when sellers will offer this arrangement. Basically, this is a delayed agreement to purchase the home in the future at a price that is fixed today.
How it works:
  • The amount of the rent is above the going-market rate.
  • Extra funds above the market rate will count towards the renter’s down payment in the future when the home is purchased.
  • Lenders typically still allow those above-market funds collected to count towards a down payment as long as everything is documented.