reverse mortgage purchase pdf
TRANSCRIPT
Effective Mortgage Company 1
Using A Reverse Mortgage To Purchase A Home
A HECM (Home Equity Conversion Mortgage) is a special
type of mortgage that enables homeowners age 62 or older
to tap into the equity in their home. Unlike traditional home
loans, no repayment of the HECM loan is required until you
no longer occupy the home as your principal residence. At
that time, the lender will declare the mortgage due and
payable. What is borrowed plus interest is due to the
lender, remaining equity remains with the estate.
Effective Mortgage Company 2
The HECM is insured through FHA
and is a non-recourse loan.
So what does non-recourse mean?
The homeowner or their heirs will never be asked to pay
back more than the value of the home, even if the debt has
grown to be greater than the value.
Effective Mortgage Company 3
This sounds great for refinancing.
How does the purchase work?
The same way, the borrower will qualify between 61.9% to
77.6% LTV depending upon their age. The older you are,
the more LTV (smaller down payment) you qualify for. So
with a purchase; figure a down payment of 22.4% to
38.1%, plus closing costs.
Chances are your senior borrowers may need at least this
much of a down payment to qualify for traditional financing
to get their DTI down.
Effective Mortgage Company 4
Effective Mortgage Company using IBIS (Reverse Mortgage Software) can give your senior prospect an immediate down payment figure; all we need is a purchase price, date of birth
and zip code!
It is easy, it is fast!
Effective Mortgage Company 5
•No Mortgage Payment! (Taxes and Insurance payments
are required and must be maintained)
•Leverage crucial retirement cash liquidity
•Buy up, get more house than paying cash
•Cannot have had foreclosure, short sale, deed in lieu in
the last three years
Effective Mortgage Company 6
Effective Mortgage Company 7
•SFR’s, PUDs and FHA approved Condos
•No units, manufactured, log, dome, farm, etc.
•No second homes or investment properties
•New Construction- Not eligible until the Certificate of
Occupancy has been issued
•Any repairs must be satisfied by the seller prior to closing
•Home Inspection is required, new construction omitted
Effective Mortgage Company 8
•No NOD’s, short sale, deed in lieu, mortgage rating past
120 days
•Non borrowing spouse must have credit pulled to confirm
previous mortgage rating
•All federal debt must be satisfied
Effective Mortgage Company 9
•No loan to get our loan; business, bridge, mortgage,
retirement account, credit card, etc.
•Proceeds from the sale of a business, real-estate, etc. are
allowed. Paper trail must be documented.
•All funds must be seasoned for 90 days, large deposits
sourced.
•Mattress money, cashiers checks, etc. will not be allowed
Effective Mortgage Company 10
•Borrowers may keep existing Real Estate
•All existing real estate housing expenses will be added / buyers income (no credit for rental income)
–Looking for 45% DTI (exceptions can be made)
•Borrowers will sign Verification of Occupancy and some instance a Letter of Intent
•Must occupy the residence within 60 days or default under the terms of the mortgage and foreclosure proceedings can begin
Effective Mortgage Company 11
No Concessions Allowed
•No seller, concessions
•No lender concession
•No broker concession
•No real-estate agent (buyer or seller) concession
•No concession from any party in the transaction before, during, or
after the loan closing
•No carry back financing
•No gift of equity
Gift funds are allowed! – They must be sourced
Effective Mortgage Company 12
1.Home Inspection is done late – repairs must be satisfied
by seller
2.Funds are not sourced properly with a clean paper trail
—90 days unless from the sale of another
property, business, etc.
3.Real estate agents, sellers, and brokers attempt to work
in concessions
Effective Mortgage Company 13
Effective Mortgage Company 14
Bijan R Vaziri- Mortgage Originator
• 818-773-0033
Leila Vaziri- Mortgage Originator
• 818-773-0033
Effective Mortgage Company 15