Texas Reverse Mortgage Purchase Not Approved [mortgageinsurance-101.blogspot.com]
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Since the Texas constitution contains technicalities that prevent this on a home in Texas, there is not a true HECM for Purchase in that state. In the future, legislative changes and Constitutional amendments may make the HECM Purchase possible, but that could take as long as 3 years from now. Seniors must consider other options if want to buy a new home.
The reverse mortgage is a great benefit to seniors who own their own home but need more money than their social security provides them, and the HECM is a program that allows seniors over the age of 62 to purchase a new primary residence using the proceeds from a reverse mortgage. The program has been around since 1989, but it is only recently that the FHA, a division of the U.S. Department of Housing and Urban Development (HUD), approved the HECM for its purchase program. This means that seniors have a government insured option for buying their home.
The HECM for Purchase takes the reverse mortgage a step further and puts that money directly toward the purchase of a new home that is more suited to their needs, such as closer to family or more manageable in size.The Texas constitution does not allow the purchase program because it stipulates that the homeowner must already be on the title of the property prior to taking out a reverse mortgage. Instead, a senior homeowner could purchase their home, then pay themselves back using the proceeds from a standard Reverse Mortgage. There are some stipulations that could prevent this action, though, such as seasoning requirements of 3-12 months required by some lenders.
There are a few other options for seniors in Texas, besides the HECM for Purchase.
They can still obtain a reverse mortgage as homeowners in other states can.
The reverse mortgage can help seniors who are struggling to manage their rising medical bills and other expenses during their retirement on top of mortgage payments. The program allows these homeowners to convert equity in their homes to a tax-free income, without mortgage payments, and without the risk or reality of having to sell their home or sign over the title.Opportunities for Reverse Mortgages are greater than ever right now, and seniors in Texas should not feel discouraged because of this one technicality. They should look at the alternate solutions for reverse mortgages. In fact, the U.S. Department of Housing and Urban Development (HUD) recently raised the reverse mortgage limits to $ 625,500 to help stimulate the economy and provide immediate relief to senior homeowners facing unaffordable payments.
If seniors in Texas can wait a couple of years, their options for reverse mortgages will continue to increase to the same options that seniors in other states have. As of now, there is a lack of verbiage in the Texas State Constitution to allow HECM for Purchase. Because we have to amend the State Constitution to be able to offer HECM for purchase, the earliest an HECM for purchase in Texas would be allowed is 2012. The Texas Legislator only meets approximately once every 14 months, so the quickest this can be brought to a vote is in 2010 for a 2011 ballot.
Suggest Texas Reverse Mortgage Purchase Not Approved Issues
