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Reverse mortgage question
Old 05-02-2014, 06:01 PM   #1
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Reverse mortgage question

Anyone know of a company that will do a reverse mortgage on a house that the owner does not live in?

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Old 05-02-2014, 06:27 PM   #2
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Htown Harry's Avatar
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Posts: 1,517
I'd rate the chances of company writing a reverse mortgage outside of the FHA guarantees as slim. Inside the FHA rules, you must occupy the property as your primary residence.
About Reverse Mortgages for Seniors (HECM) - HUD
Borrower Requirements
You must:
  • Be 62 years of age or older
  • Own the property outright or paid-down a considerable amount
  • Occupy the property as your principal residence
  • Not be delinquent on any federal debt
  • Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
  • Participate in a consumer information session given by a HUD- approved HECM counselor
HELOC's or HEL's are the only alternative I know of.

No doubt a continuous prosperity, though spendthrift, is preferable to an economy thriftily moral, though lean. Nevertheless, that prosperity would seem more soundly shored if, by a saving grace, more of us had the grace to save.

Life Magazine editorial, 1956
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Old 08-18-2014, 10:16 PM   #3
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Bumping this, because it could be appropriate to consider a reverse mortgage in some instances. After filling out this cost estimate, I found that the actual cost, including all fees could be a good alternative to selling the homestead.

The lower age eligibility limit is 62, and the total expenses would be higher at the younger age, but, depending on the financial condition of the person taking out the loan, it could easily be a good alternative for older persons who need cash for whatever reason.. nursing home for spouse, urgent repairs, or to keep safe other assets that would be more important in the longer term. If not for self, then for parents or relatives.

There are some downsides, but government guarantees could be important in the case of lowering home prices, and peace of mind for an older person can be a valuable commodity. The idea of having to downsize and move at age 80+ is daunting.

If you try the calculator... (an easy fill in the blanks).. check the difference between age 62, and 75 (for instance) as to the total cost differential.
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