Different Mortgage Options Available for Senior Living Properties

Everyone dreams of owning their perfect home. It does not matter if you are young or not-so-young; a home is a central part of your life. If you are interested in any senior living properties and are considering taking a loan, but are worried about all the different types, you have come to the right place. Let us enlighten you on some of your options.

Fixed-Rate Mortgage

This is the oldest type of mortgage in the book. It has been around for decades. This mortgage enables you to take out a sum of money and repay the debt in equal monthly payments over a fixed period. The best thing about this loan is you know exactly how much you have to pay every month as the interest rate is fixed. This means you can plan your future without any worries. However, make sure interest rates are low when you get the loan.

FHA Loans

If you are a first-time homebuyer, this loan is made for you. This is because this loan features low down payments and does not require you to have a high credit score. You can get an FHA loan even if your credit scores are less than perfect. How does it work? FHA insures your loan. This gives lenders the edge as they do not have to worry about loan defaults.

Interest-Only Mortgage Loans

These mortgage loans enable you to pay only the interest of the loan although this can be done only for a period, usually the first five or ten years of the loan. This mortgage is beneficial if you are looking for retirement homes for sale and are a first-time buyer. As most first-time homebuyers struggle with loan payments during the first year, this loan is considered especially advantageous as it gives you the option of a lower payment during the first few years.

HECM for Purchase Reverse Mortgage

This mortgage product can be used by borrowers age 62 or better to reduce cash out of pocket at the time of purchase and never have a monthly payment while the home purchased is used as your primary residence for as long as you or your surviving spouse remain in the home.  Say you want to purchase a home and have only $150,000 in cash.  With a HECM (Home Equity Conversion Mortgage) for Purchase, you could buy a home for $300,000 and put in your $150,000; the mortgage lender would lend you the balance and allow you to ‘buy up’ to a bigger home, or one with more luxurious options added.  By the way, the mortgage is also NOT contingent on good credit history or income.  Ask your mortgage lender for details…

Traditional Reverse Mortgage

These are available for seniors over the age of 62. It allows you to borrow equity if there is adequate equity in your home, where the lender pays you, the homeowner, a lump sum or monthly or in periodic advances through a line of credit.

As you can see, there are several loan types that you can consider when thinking of moving to 55 and over communities and looking for funding for senior living properties. Check your options and discuss the best option with your real estate agent and bankers before making a final decision. Don’t forget to find out all the charges associated with closing the sale as there can be various processing fees that you may not have anticipated.

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