Puerto Rico, the U.S. Virgin Islands, and Guam are popular choices for retirees who own vacation homes outside the continental United States. But as you r﷽each retirement age, you may be thinking about moving permanently to your vacation property in one of these places. Taking out a reverse mortgage may also be part of your retirement planning. Fortunately, you can take out a reverse mortgage on your property in Puerto Rico, the U.S. Virgin✃ Islands, or Guam.

All three places are U.S. territories, which means you can get a reverse mortgage just as you would on property in the 50 states. However, if you plan to retire to the property, you will need to p💧ay attention to the residency rules that govern📖 reverse mortgages.

Reverse Mortgages Outside the 50 States

Puerto Rico, the U.S. Virgin Islands, and Guam are all part of the United States. This means they are covered by the U.S. Department oꦰf Housing and Urban Development (HU💝D). As such, it’s possible to take out a 澳洲幸运5官方开奖结果体彩网:federally insured reverse mortgage in ꦜthese territories, so long as you can find a lender.

A reverse mortgage may be attractive for many retirees. If you already own a vacation property in one of these places and want to move there permanently, taking out a reverse mortgage on the property could provide you with a reliable 澳洲幸运5官方开奖结果体彩网:source of income in retirement.

Alternatively, if you own property in the 50 states but want to buy a second home overseas, you can use a reverse mortgage to withdraw a lump sum from your home's equity and use it to buy a place in Puerto Rico, the U.S. Virgin Islands, or Guam♛. 

Both options are perfectly legal. However, you need to know the residency rules governing reverse mortgages. To have a reverse mortgage on a property, it needs to be your 澳洲幸运5官方开奖结果体彩网:principal residence, meaning that you spend the majority of the year there. This 𒆙is why you can’t have two reverse mortgages at the same ♌time.

Planning Is Key

These rules may aꦫffect your overseas re🏅tirement planning in a variety of ways:

• If you take out a reverse mortgage on an 澳洲幸运5官方开奖结果体彩网:overseas property, make sure you’ve paid off any reverse mortgage on your house in the 50 states. If you don’t and are away from it for more than six months at a time, then your lender has the right to foreclose on the loan. This could mean that you lose your primary house.
• If you take out a reverse mortgage in the 50 states to pay for your retirement living expenses overseas, you won’t be able to live permanently in your vacation home. This is for the same reason: If you are away from the property on which you have a reverse mortgage for more than six months, you are regarded as having moved houses and are at risk of 澳洲幸运5官方开奖结果体彩网:foreclosure.

As long as you keep these rules in mind, there is no reason why a reverse mortgage can’t be a part of your retirement planning in Puerto Rico, the U.S. Virgin Islands, or Guam.

Reverse Mortgages in Puerto Rico

Puerto Rico is a U.S. territory, and its political status remains a source of tensio🅠n between the island and the U.S. federal government. However, this gray area doesn’t affect reverse mortgages. Reverse mortgages have been available in Puerto Rico for decades, and they work in exactly the same way as they do in the 50 states. 

That said, there has been a high rate of foreclosure on reverse mortgages issued on the island over the past five years, and many seniors have lost their homes as a result. HUD responded by providing homeowners under foreclosure with resources that can help them understand and mitigate this risk.

Reverse Mortgages in the U.S. Virgin Islands

The situation is similar in the U.S. Virgin Islands. Because the Virgin Islands are a territory of the United States, borrowers are eligible to receive a reverse mortgage through HUD in exactly the same way that residents of the 50 stat𓃲es can, and the same rules apply to these mortgages.

The market for reverse mortgages in the U.S. Virgin Islands is much younger than in other parts of the U.S. This means that while homeowners in the rest of the U.S. have a choice of many reverse mortgage providers, the options for revers꧃e mortgage lenders in the islands is smaller.

Reverse Mortgages in Guam

Getting a reverse mortgage in Guam is the same as in Puerto Rico or🍰 the U.S. Virgin Islands. The island has the same po🦩litical status as Puerto Rico, meaning it is an unincorporated territory of the U.S. and thus is also covered by HUD. Reverse mortgages in Guam work in exactly the same way as they do in the rest of the U.S., and the same rules apply.

The Bottom Line

A reverse mortgage can be an effective tool for an overseas retirement, as either a strategy to fund living expenses or a way to buy a vacation home. You can take out a reverse mortgage on property in Puerto Rico, the U.S. Virgin Islands, or Guam. Just make sure you know the residency rules that apply to reverse mortgages because breaking them could lead your lend🐓er to foreclose on your loan.

One thing to note is that a reverse mortgage may not be the right solution for you if you want to use the equity in your home. You may want to consider doing a cash-out refinance. Alternatively, you may want to apply for a home equity or a home equity line of credit (HELOC). Although these two options require monthly payments, they come with lower fees, so you'll be able to keep more money in your pocket.