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Thomas Said:

I need a new direction. Should I seek Jesus or a reverse mortgage?

We Answered:

Reverse mortgage could mean the greatest time of your life, so the commercials say.

Gregory Said:

Im new to the real estate business, and im trying to help a family that has a reverse motgage.?

We Answered:

If they have any equity in the house, they can refinance.

Reverse mortgages are not bad as such, but sometimes they are highly inappropriate for the people that are talked into taking them. Also, many of them have very bad terms and huge upfront costs. In theory, they can be good in a certain set of restricted circumstances for older people with equity in a house and limited other investments.

Gertrude Said:

Can you take a reverse mortgage on your house, then use the money to purchase new real estate and rent it out?

We Answered:

In order to be eligible for a reverse mortgage you must be a minimum of 62 years of age, therefore at 19 years of age you would not be eligible. A reverse mortgage is a FHA backed mortgage. I am sure once you complete the purpose of the loan section one of the options would not be to invest the proceeds from a reverse mortgage into investment properties. The FHA is not geared to make individuals wealthy.

On a reverse mortgage the applicant may opt to get monthly payments or one lump payment. There might be a limit as to the dollar amount for each applicant.

You may do the same thing with a refinance of your property. You must have the equity in the property to be able to refinance it. Also you must be qualified to refinance with the proper credit report and credit scores. Once the loan close you may invest the proceeds of the loan into what ever you would like, pay off debts, make major purchases, and invest in real estate. These are all viable reasons to refinance your home.

A reverse mortgage is not geared for this type activity.


I hope this has been of some benefit to you, good luck.



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