Home Buying in Portland>Question Details

daves3219, Home Buyer in Portland, OR

What are my options for cutting a deal involving a reverse mortgage with a condo group or association that is not currently FHA warranted?

Asked by daves3219, Portland, OR Thu Dec 12, 2013

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The most prominent type of reverse mortgage is the HECM (Home Equity Conversion Mortgage). They are insured by FHA and are the ONLY reverse mortgages that are federally insured.

The condo must be FHA approved in order to obtain a HECM.

Your option here would be a Non-HECM Mortgage, if you can find one. See below for some information

Single-purpose reverse mortgages are offered by some government and non-profit organizations. They may only be available in some areas for homeowners with low to moderate income and used only for the purpose specified by the lender (for example home repairs or property taxes).

Some lenders also offer proprietary reverse mortgages, which are not federally insured and are typically designed for borrowers with higher home values.

I hope this helps! Best of luck!



Tony

Tony Grech | Mortgage Loan Originator | NMLS 977416
PMAC Lending Services, Inc.
24901 Northwestern Highway Suite 407
Southfield, MI 48075
Toll-free (855) 642-4762 | Fax (248) 945-4842 | Direct (248) 728-0078
tony.grech@pmac.com
0 votes Thank Flag Link Thu Dec 12, 2013
cont. The mortgage company would have to pass any profit on to you. However, if the mortgage company loses money, they cannot come after you or your heirs to recoup it. To buy a house with a reverse mortgage for purchase, you have to take a short course in the financial and legal issues involved and provide the certificate to the mortgage company - an FHA/HUD requirement. They want to make sure you know what you are getting into.
Flag Tue Dec 24, 2013
On a reverse mortgage for purchase, unless there is another fantastic real estate bubble, you are pretty much going to lose all the money you put up as a down payment. After that, you will not be able to afford to buy another house, so you need to figure that you will live in the house with the reverse mortgage forever - which is okay if that is your plan. The lender may even end up paying your mortgage, tax and insurance payments long after the money you originally put down runs out. You will be living in a house which you cannot leave to an heir - it will be owned by the mortgage company or the government. But they cannot claim it until you move out or die. If there is a huge increase in the house's value, it is conceivable that when it is sold, either by you or the mortgage company, the selling price will cover all the money you owe through the reverse mortgage plus the amount you put up as a down payment, in which case you would get anything left over.
Flag Tue Dec 24, 2013
I think you are writing about a reverse mortgage for purchase. Generally, the FHA will not issue a reverse mortgage for purchase for a property that is not FHA approved. They do not like to issue loans for condos. Conceivably if it was a 2 or 3-unit condo, you might get them to reconsider it. But the problem is usually that the condo owners do not want to go to the expense of bringing their property up to the standards of the FHA. So you can pretty much forget getting a reverse mortgage for purchase of a condo.
Flag Tue Dec 24, 2013
You usually get a reverse mortgage when you have 100% equity in your house and own it free and clear. They give you about 1/2 the value back in a guaranteed amount each month. The fees are pretty high have you considered an equityg line of credit that has much lower fees? The property where you live does not make any difference what kind of loan you have unless we are missing something? I don't think living in a FHA approved building makes a difference to the lender only when you sell can it be a problem for you. Good Luck Tom Inglesby, Broker, RE/MAX
0 votes Thank Flag Link Thu Dec 12, 2013
Generally, getting a reverse mortgage has no implications on where the building is FHA approved or not. However, I can refer you to an expert in Reverse Mortgages that can answer all your questions. Let me know if you want to proceed.
0 votes Thank Flag Link Thu Dec 12, 2013
Are you purchasing or refinancing?
0 votes Thank Flag Link Thu Dec 12, 2013
Purchasing.
Flag Thu Dec 12, 2013
Purchasing.
Flag Thu Dec 12, 2013
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