The current economic status has affected most of the elderly. Some of who have decided to invest their money on stocks in their younger years may have incurred loss as their values continue to sink. Those who have decided to put their money on interest-earning investments may have not maximized their earnings. This is because interest rates on the market have declined. Not to mention, the continuing inflation that has caused a rise in various good and services.
For those elderly, who have properly managed their finances, this may not be a big problem. They can continue to enjoy the quality of living they had before. However, what about those who are living in a fixed income? How can they augment their income if they cannot get good-paying jobs for their age?
One solution for this problem would be reverse mortgage. This allows elderly or seniors to take out a loan against their home equity. As a result, the bank gives them cash based on the percentage of their home value and the age of the youngest co-borrower. You can actually see that in obtaining the loan, the role of lender and the borrower is reversed.
You may wonder when the repayment takes place. The principal and the accrued interest would have to be paid back when the property ceases to be the main home or if the borrowers are deceased.
Home Buying and Reverse Mortgage
Some elderly wants to move to another place where they could be closer to their kids or perhaps find a smaller home they can manage. They also want to move for obtaining a more elderly-friendly homes where certain modifications for them are already available. And with the current economic crisis, this yearning may not be actualized for it is in fact very hard to get approved for financing.
Recently, reverse mortgage has been made available to elderly who wants to purchase a new home. This is what they call the Home Equity Conversion Mortgage or HECM. This was made to be effective last January 2009 and was mandated by the Home and Economic Recovery Act of 2008.
There are tons of benefits that the elderly can obtain from this kind of financing. If the value of their homes exceeds the amount they borrow, they can actually pocket more cash for their other needs. At the same time, the same concept of repayment (mentioned above) will be followed. Therefore, this actually makes granddads and grandmas obtain a mortgage-free living while they still occupy the property.
One of the greatest consolation that this kind of program has given to the elderly is they do not have to be qualified for their income. This can be obtained with no regard for the income they will be receiving every month. They can avail of the loan even if they have none. However, how can old people qualify for this loan? Here are some of them:
1. Age should be at least 62 years of age.
2. The property purchased should be owner occupied and shall be made as a primary residence. They should occupy the property within 60 days from the closing date.
3. The property obtained must be a condominium or a 1-4 unit homes. They should also be fully completed and not in the process of construction.
4. The property should not be used as lien for other debts.
5. The borrowers should have undergone sessions of counselling from HECM counsellors or other counselling services approved by HUD.
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3 Bedroom Homes in Sun City and
Gold Canyon Condos for Sale. You may also check out
Sunridge Canyon Affordable Homes for Sale.
