Reverse Mortgage Advantage
An advantage of this new program is that the HUD appraises the former home by its actual appraised value and not by the FHA usual method of using the quick sale value. The quick sale value is the value of the property if it had to be disposed off very quickly. This value is usually considerable lower than the actual value of the home. With the new method, a senior may not even have to make any down payment for the new home. So seniors buying a new house will enjoy the benefit of the actual higher appraised value of their old property. This reduces considerable and sometimes completely eliminates the need to make a down payment for the new property. It also leaves the senior with more extra funds.
To benefit more from this new program, seniors may choose to downsize by moving into a smaller home or cheaper community closer to family and friends so as to eliminate the need to make any extra down payment and also leaves them with more extra proceeds from the sale of the old home for their personal use. The new program is even made more attractive when one considers that they would not have to make any monthly mortgage payments for as long as they reside in their new home.
The new Purchase Reverse Mortgage became effective in January 1, 2009 and since then the FHA began to insure reverse mortgage purchase loans. If you are a senior who qualifies for this program and wishes to change your home now is the best time to begin looking around for your new home.
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