A Second Mortgage with Reverse Mortgage Features Is now Available.
This option may make sense for some seniors. Here’s a few advantages and examples of when the second mortgage reverse mortgage loan may be utilized:
1. Keep existing first mortgage in place, get a lump sum of funds without having to make monthly payments on the second.
2. Low closing cost loan. There is no upfront or monthly mortgage insurance on this loan like some other reverse mortgage loans. Customary other fees such as title insurance, escrow, appraisal and lender fees apply.
3. Use the funds for a down payment on a vacation or second home. The advantage here would be that the lender who is originating the purchase money first mortgage, does not have to include the second mortgage monthly payment when qualifying…..since a payment isn’t required making qualifying for the purchase money loan, easier.
4. A deferred college tuition loan with a deferred payment for grandchildren. They can either gift the funds without asking for a repayment or the grandkids can start repaying the loan once they graduate and are in the workforce. Many people don’t know some education loans do not offer deferred payments anymore. Also if the education loan is deferred, home loan lenders may still hit the borrower for the monthly payment anyway, typically 1% of the balance, when qualifying for a home loan.
5. Start or buy an existing business. Qualifying for a business loan can be difficult for a senior, this option can help.
Other reasons, may be to buy a car or motorhome, delay capital gains on an investment, fixing up your home pr taking a famiy vacation.
The reverse mortgage second mortgage is only available as a closed end fixed rate loan, no line of credit is available. Also please check with your financial advisor as to tax deductibility since laws have changed recently.
This new second mortgage option adds to the new low cost reverse mortgage and jumbo reverse mortgage options that came out in 2019. To learn more about these options we can have a conversation or feel free to email me.
Warmest regards,
Kevin Walton C2 Reverse NMLS 245923 DRE 01453270 Cell: 805-276-1942 www.californiareversemortgage.biz
C2 Reverse Mortgage Corporate NMLS 135622 Corporate DRE 01821025 Corporate ph. 858-312-4900