It is necessary for seniors who are considering a Home Equity Conversion Loan to gain understanding from a Reverse Loan Advisor who has the capacity to explain the program at length and disclose the positive and negative features of the program. There are ways available for seniors to purchase a new principal residence with a reverse mortgage loan.
The Reverse Loan is really an extraordinary lending product created specifically for the retired homeowner. The reverse is not for everyone, therefore it is imperative for senior consumers to be educated and review their own personal situation and decide if it is in fact befitting for them.
The Reverse Loan, up to now is still probably the most under used program within the home mortgage field. A number of the industry providers of reverse mortgages have been receiving favorable media attention as the aging senior population grows. These loans if used correctly can possess life changing results. The recent financial crisis in this country has caused seniors to watch as their life savings have shrank down considerably and some even struggle to cover the daily cost living expenses, home owners insurance, taxes or worse maintain the home after an illness. The reverse program provides for a simple solution.
The newest program that's gaining traction is a Purchase Reverse. This loan provides financing on a new home that is more suitable and keeps the cash liquid from the prior sale which can then be utilized as reserves and at the same time eliminating the need for future mortgage payments on the new home. This program can help many seniors who either possess a large home and want to downsize or want to move to a different area of the country such as snowbirds who move to Florida and Arizona for the warm climates.
The Purchase Reverse loan is basically just like the traditional mortgage as far as the loan process, but it is used to buy a home without the credit or income requirements used in a traditional forward mortgage. In most instances they take the proceeds and get a new home while using funds that they received in the sale. Doing this either reduces the total amount they have remaining for use within their retirement years. With the brand new program they will just use a small part of the proceeds like a down payment and keep all of those other tax free profits as their nest egg.
By using the actual Reverse loan program to buy they can stay in their house for the rest of the lives and in no way make another home loan payment. All they will need to pay is the taxes, insurance and maintenance of the house.