There exists a common misconception that a reverse mortgage can be used to fix a home, with no further clarification. It appears to stem from various marketing efforts that you see in print or on television, that make it seem like a simple process. The general perception is that we can close a loan for a customer with a home in disrepair, and provide the cash at closing needed to do the repairs. Unfortunately, that is far from the case in many instances.
If you are interested in an FHA reverse mortgage, and your property has a well or septic tank, there are some specific requirements you will need to be aware of.
When you own a property in a rural area, the most likely reverse mortgage issue you’ll have is with the appraisal. The appraiser is required to find three similar sales in the past twelve months that are “nearby.” If similar sales cannot be found, it can be a challenge to get the loan approved.
Some of the common complications regarding appraisals on rural properties include excess acreage, multiple buildings, and uncommon property types.
When you call a lender to inquire about a reverse mortgage on a manufactured home, you might hear that they don’t accept manufactured homes. Some lenders don’t do reverse mortgage loans on manufactured homes at all. The good news is that there are plenty of lenders that do allow manufactured homes, and the property type is definitely acceptable to HUD—with some exceptions.
In this space, we’ll attempt to explain some of the intricacies of the reverse mortgage and keep you up to date with what his happening in this small part of the mortgage world. We’ll also discuss some general topics that are focused on aging, health, travel, etc. that you might find useful in your day to day life.
Our goal is to educate our readers about reverse mortgages so that they can make well-informed decisions when considering a reverse mortgage. We love feedback, so we encourage you to share your thoughts on our posts or other matters. If you have a reverse mortgage topic that you would like to see discussed, please contact us.