real estate finance - full book (500 pgs)

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Unformatted text preview: ght join with a transferred employee in buying a house in a high cost area to facilitate the transfer. The employee would then be given an option to buy out the employer at a stated time. REVERSE ANNUITY MORTGAGE A reverse annuity mortgage is a loan which utilizes the equity in a homeowner's residence to make payments on the property or to provide living expenses for persons retired with fixed retirement or pension incomes. The lender makes the payments on the property or provides cash for the owner from the equity for a fixed period, until a specified loan–to–value ratio is reached or until the homeowner dies. The lender charges interest for the use of the money. Upon sale of the property, the amount paid through the annuity will be repaid from the equity in the property. This may be especially attractive to an elderly homeowner, as it eliminates the need to make monthly payments on the residence or provides cash for living expenses. 9-50 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 9: FIXED RATE MORTGAGE AND ALTERNATIVE MORTGAGE INSTRUMENTS RAMs are available only for those 62 or older The home must be free and clear, or have a low existing loan. The program is for single–family dwellings only, except for FHA approved condos. Neither Fannie Mae or FHA makes direct reverse loans. Instead, approved lenders make the loans with Fannie Mae and FHA backing. TWO–STEP MORTGAGE The purpose of a two–step mortgage is to allow home buyers to qualify for a loan based on lower interest rates and therefore lower payments. You will find that the two– step mortgage has many of the features of “loans amortized for 30 years but due in 5 or 7 years” discussed in previous section of Balloon Mortgage. The chief advantage of the two–step over a balloon mortgage or the previously discussed “amortized for 30 years, but due in 5 or 7 years” loan is that borrowers aren't forced to move or refinance–th...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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