Most people in our country dream of owning their own house. This house does not only provide them shelter, but it can also provide them with periodic cash flow. ‘How is that possible?’ you may wonder. A reverse mortgage is a financial instrument that allows a lender to keep their home as collateral and then provide them with monthly payments for the rest of their life. Here are some commonly asked questions that people ask when purchasing a home equity conversion mortgage (HECM).
1. Would I Have Any Obligations After I Buy an HECM for Purchase?
Yes, you would have some obligations. You will be required to pay homeowners’ association fee, premiums of homeowners’ insurance and pay the property taxes and utility bills. Also, you will be required to keep your home well maintained so that its value does not deteriorate.
2. How Do I Qualify for HECM for Purchase Loans?
In order to qualify, you must be living in your own house, must be retired and be 62-years-old or above. Some lenders have other additional requirements. You can contact them to inquire about any further requirements. They are obligated by law to disclose all requirements to you before you sign the documents. This way, you can easily compare various HECM lenders and choose the one that offers the best deal.
3. Can I Get an HECM for Purchase Loan to Build My Own House?
No. HECM for purchase loan is not a construction loan. In order to get an HECM loan, it is mandatory that you have bought your own house and you must also possess a Certificate of Occupancy. You can contact your local bank or credit union if you want to borrow money for constructing your own house.
Longbridge Financial is an HECM lender that is approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation. It is a member of the NRMLA and is considered as the best reverse mortgage provider in New Jersey. Longbridge Financial is also one of the fastest growing HECM providers in the US. In 2016 alone, the annual growth of Longbridge was 277.4% and was ranked 22nd in the list of ‘Top 100 HECM Originators’.
