How a Texas Reverse Mortgage Loan is used to buy a New Home Loan

Posted on :  August 13, 2016

Purchasing a new home after retirement can become a reality with proper planning. While this can be easy for the wealthy Texan, there are many retirees that will not see the day to live this experience and enjoy the benefits of a Texas reverse mortgage loan. Do you and your spouse keep ignoring the conversation on getting a new home? Are there repairs that have gone undone for a long period of time? Do you constantly turn to your children to help you take care of your home?

As a Texas reverse mortgage company we see seniors finance the purchase of a new home without the responsibility of monthly payments. Most people believe that the only benefit to this type of loan is that it helps retirees remain in their homes as they use income from their property. Here’s how it works:

* Applicants 62 years or older that are buying a primary residence must make a down payment and take care of closing costs. A lump-sum loan is then used toward the purchase of the home. There are no monthly payments to pay down the debt, and interest accrues on the loan with principal plus interest due when a spouse or the last co-borrower moves out or passes away.

* A reverse mortgage loan gives retirees a chance to use not only move to into a new home but live in a warmer climate or be closer to their family.

* If used strategically, a senior can invest in higher-yield investments outside of their home.

A majority of Texas reverse mortgage loans are FHA-insured HECMs or home-equity conversion mortgages with the loan amount being a percentage of the appraised value of the home. In the case that a retiree leaves a portion of the proceeds in a line of credit to use in the future, interest is charged only when money is drawn from the line of credit. Let’s look at an example:

George and Heather Maslow were hoping for a 2,800 square-foot house with a nice pool in Dallas, Texas but it was listed at $533,000. Their home in Houston was appraised for $370,000 that had to be paid off. After making a down payment 50% of the listed price, their reverse mortgage loan covered the rest of the home. The Maslow’s decided to add more money down to help them quality for a line of credit with a variable interest rate.

Please note this is a fictitious example and Texas reverse mortgage loans will depend on income and the ability to pay back the loan.

Apply for a reverse mortgage loan today and one of our friendly financial representatives will answer your questions.

Please note this is a fictitious example and Texas reverse mortgage loans will depend on income and the ability to pay back the loan.

Apply for a reverse mortgage loan today and one of our friendly financial representatives will answer your questions.

Texas Administrative Code RULE 7 §81.200 Required Disclosures …(c) At each physical office, and on its website, a mortgage banker or an originator shall conspicuously post the following notice:

“CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR A LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”

This material is not from HUD or FHA, nor was it approved by HUD or any government agency.

Tags: , ,

Comments are closed.