HECM reverse mortgage loans in Aventura, FL are growing quite rapidly. There are many different types of HECM reverse mortgage loans in Aventura, FL one can obtain. There is the reverse mortgage for purchase and also a traditional reverse mortgage. Each have their inherent benefits as well as drawbacks.
In this article, we will review which type of reverse mortgage might be beneficial to you during your search for this unique financial product. The reverse mortgage has been around for quite sometime, however, the reverse mortgage for purchase has only been around for less than 10 years. Congress passed the reverse mortgage for purchase in 2008. Aventura residents can now take advantage of this product.
The HECM reverse mortgage for purchase in Aventura is meant to allow a senior over the age of 62 to obtain a new home without having to pay a mortgage.
You may think this sounds to good to be true but is not. However, few often have the funds to obtain this type of reverse mortgage. You must put down at least 40% of the home's value to qualify. This makes sense if you were considering buying a home with cash but the liquidity issue makes you think twice. With this type of reverse mortgage in Aventura, you can buy a new home without having a mortgage payment. You still must pay other types of bills such as real estate taxes, homeowners insurance, & HOA fees.
The other type of reverse mortgage loans in Aventura would be the traditional reverse mortgage. Aventura residents who already live in their home but wish to eliminate their mortgage payment and/or cash out some of the equity in their home without gaining a mortgage would be attracted to this type of reverse mortgage. It is important to note, that to qualify you must be over the age of 62, your home must be in well-kept condition, and you must have significant equity in the home. The older you are and the more equity you have in your home will dictate the actual payout.
Now that you know the type of reverse mortgage loans available to you, you may want to know if this product is safe. Yes it is. The federal government insures all HECM reverse mortgage loans. You may wonder why this is important if you obtain a lump-sum of cash. There are other options with how you can opt to receive your funds. You can get installment payments or a line of credit. So if the bank were to fail, so would your payments if it was not federally insured.
Entitlement programs are typically not affected as this is not earned income, but home equity. So if you are concerned about your Social Security or Medicare getting disqualified you shouldn’t be concerned. If you would like to be extra sure, you can always consult with your tax adviser, accountant, or you can go to this website. There is another guideline you must follow. You have to live in the home as your primary residence. In other words, you cannot obtain a reverse mortgage than buy another property and move into it.
You would effectively turn your primary property into an investment property if this was the case and the reverse mortgage loan would come due. This is something that you want to be extra cautious about as you do not want the loan to come due. It would defeat the purpose of the reverse mortgage loan in Aventura, FL if so.