Mortgage to Build a new House
Ken Tighe has sent the following question in the ask experts series. My wife will be 65 on April 5, 2017 and I was 65 on 2/4/2015. We currently own our home but want to build a new home on a lot we own that will better accommodate us in our advanced age. We have the cash to build the new home but can a reverse mortgage be used to pay off the construction loan once the home is completed?
I would love to give you a simple and quick answer but the truth is “maybe”. There are so many caveats that surround this type of transaction that could make the property ineligible at the time you go to retire the construction financing that I can’t tell you for sure that the construction loan can be retired by the reverse mortgage.
For example, HUD just implemented a new rule that you cannot use reverse mortgage proceeds to pay off a loan that was taken less than 12 months ago. That would mean that the last draw of the construction loan had to be taken at least 12 months prior to the reverse mortgage application. You also have a lot of issues you have to concern yourself with depending on whether or not you are the builder and required warranties, etc. for new construction that you can’t give to yourself. Depending on the location of the property, there are sometimes issues with the permits and final Certificates of Occupancy with relation to the HUD requirements of same.
Then there is always the property itself. If you build in an area where similar homes and sales of such are abundant, getting an appraisal is usually not an issue but if you build in a rural area or if your property is unique and recent similar sales cannot be found, it may be a great home but may not be eligible for HUD insurance and therefore ineligible for the HECM reverse mortgage loan.
To make a long story short, there is a possibility that if you need to pay off that construction loan within the first 12 months of construction and need take out financing for that specific function, the reverse mortgage may not achieve that goal. If all the circumstances come together to meet HUD requirements, it might be fine but I don’t think I would recommend proceeding if that was the only way the deal would work and you would risk financial peril if the reverse mortgage was not available to take out the construction loan immediately preceding completion.
If you can build the home and the reverse mortgage is your preference but not a requirement, and knowing that you may have to wait a year to apply after completion or that you may never be able to qualify for a reverse mortgage on the property and want to construct the home anyway, then at least you can plan accordingly.Properly apply nail tips should never cover more than how much of the natural nail How to add a video to google slides what does renter insurance cover what does the name gianna mean How to do tricks with falchion knives How to pleasure yourself What causes brown tips on air plants what does patrician mean How to dissolve adhesions without surgery what are the first signs of a bad gallbladder How to dye just tips of hair what does inquiry mean what does persona mean How do skateboarding tricks work what does half life mean what does candidate mean what does mm mean What are some of the tricks into gettjng into college What does "medicare wages and tips mean on w-2?" what does ginger beer taste like what does reclusive mean How old do you have to be to get vaccinated How to day trade? How often to feed betta fish How do i disable balloon tips in the notification area in windows xp what episode does itachi die How to pan fry pork chops How to clean dry erase board what does wsg mean on snapchat what are speakeasies Clovere flex how to put tips last what does oml mean How to cook brats Who do chopsticks start to fade at the tips what does a diabetes attack feel like what does pushing p' mean tiktok How to claim cash tips as a server How to take a screenshot on laptop? How to make posts shareable on facebook? what is 555 mean How tightly should hearing aid ear tips fit How to cook brown rice on stove Tricks on how to make your whole head curly How many times has tom brady been to the super bowl? How to hack a facebook account? Group of friends who do amazing tricks on youtube what does a trans vagina look like How to change my name Tips for getting into the habit of watching what you say How to solve absolute value equations? How to increase penile size and strength? How to draw food? How to heal cavities in 2 days How to remove a hacker from my phone How to make burnt tips How much to get a passport? what senators are up for reelection in 2022 what does vicious mean How to build trust in the workplace: 5 tips for better relationships How to say i love you in russian what are the 7 leadership styles what does a muscle tear feel like what does mind over matter mean what does neurotypical mean Safty tips for when touring otavalo what does ngo mean what are crowns what does egr stand for what does shelling mean in war what does d/b/a mean what does lord mean How to do screenshot on pc what does spam mean Math brainiac who teaches kids math tricks How to use world edit Tips of how to lose weight fast How to get a snap streak back? How to boil eggs for easter? what does coconut milk taste like How to clean sink drain what are konjac noodles How to get rid of headache fast? Tips on how to grow your nails what does accountable mean How to dry basil leaves? what are bait dogs what does zest mean what does it mean when a kitten purrs How to play gang beasts Which cake decorating tips to use cupcake How to hack pokemon go How to find a movie that i can t remember How to buy icloud storage what does shonen mean what does swipe right mean what is predicate mean what does madam mean How to play freecell Atv drift and tricks how to change keyboard controls How to heal inflamed esophagus naturally what dose wyd mean Without tips counted how much does an average server make