Here's one of the first articles I've seen on new reverse mortgage products designed for second homes.
Reverse mortgages also can be a potential solution to saving the family cabin. Historically, reverse mortgages have been made to homeowners age 62 or older and exclusively on a primary residence. Rapidly appreciating and long-held second homes have become surprisingly valuable, providing another possibility for older homeowners to pay off current mortgages and draw funds to supplement their income for monthly expenses, health care, family reunions and investments. There are no restrictions on how reverse-mortgage funds are used.
A reverse mortgage on a second home could be an appealing alternative for an individual or couple wanting to keep a family vacation home a few more years. Often, the parents would like to leave a cabin or getaway to their children, yet they need the equity from the cabin for their retirement years. Using a reverse mortgage to extinguish an underlying mortgage on the cabin could be the needed option of keeping the cabin in the family.
When the parents die or transfer title to their children later in their lives, the kids could sell the property and pay off the reverse mortgage with the proceeds, or refinance the property and continue the second-home use. When a child reaches the age of 62, the child would become eligible to take out another reverse mortgage on the vacation home.
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