Reverse mortgages are limited to primary residences, and since you can have only one primary residence, it is not possible to have two reverse mortgages at the same time.

Reverse morꦍtgages can be suitable for snowbirds who also are seniors. Many snowbirds have second homes in the Sun Belt, Hawaii, or Florida, so they have built up equity in two distinct properties. Since a reverse mortgage is an option for only one ༺of those properties, there are alternatives such as home equity loans or cash-out refinance plan.

What Is a Reverse Mortgage?

A reverse mortgage is a special type of loan that is available to people who are 62 and older who own their own homes and have a considerable amount of 澳洲幸运5官方开奖结果体彩网:equity in their properties. It allows retirees a way to borrow money against the value of their homes. The loan is advanced in a lump sum, as a fixed monthly payment, or as a line of credit.

There are 澳洲幸运5官方开奖结果体彩网:three types of reverse mortgages. The most common is the 澳洲幸运5官方开奖结果体彩网:home equity conversion mortgag🦩e (HECM). Under t🐷his program, the mortgage amount that you may borrow will beꦏ the lesser of:

1. The appraised value
2. The 澳洲幸运5官方开奖结果体彩网:Federal Ho⛄using Administration (FHA) HECM limit of $970,800, or
3. The sales price (only applicable to HECM for Purchase). If you need to borrow more, you can look into a 澳洲幸运5官方开奖结果体彩网:jumbo reverse mortgage, also called a 澳洲幸运5官方开奖结果体彩网:proprietary reverse mortgage.

Reverse mortgages come due when the homeowner dies, moves away permanently, or sells their home.

Reverse Mortgages for Snowbirds

Many snowbirds choose to buy a second home in their vacation spot of choice, whether in Florida, Hawaii, or somewhere else warm and sunny. They also may have significant equity built up in their 澳洲幸运5官方开奖结果体彩网:primary residence. It’s possible to use a reverse mortgage to access some of this money, giving them regular monthly payments, a lump sum, or a line of credit, in exchange for giving away the equity in their home.

However, 澳洲幸运5官方开奖结果体彩网:residency꧋ rules for rev💞erse mortgages state that the property on which you have the reverse mortgage must be your principal residence. This means you can’t be away from a property for more than six months and have a reverse mortgage on it.

This effectively bars snowbirds from taking out a reverse mortgage on their second home if they alrജeady have a reverse mortgage on their primary residence. However, if you have a significant amount of equity invested in your second home and want to access it, there are alternative ways of doing that. 

Accessing Equity for Snowbirds

A reverse mortgage is not the only way to access the equity that you have built up in a property.🌟 In fact, reverse mortgages only make sense for a small proportion of senior homeowners. That’s because the high costs associated with reverse mortgages make other f▨orms of borrowing more cost-efficient in the long term.

And unlike reverse ꦉmortgages, it’s possible to use these alternative sourc♚es of borrowing on two properties at once or to use them just in association with your vacation home. Th🌟e alternatives include a:

• 澳洲幸运5官方开奖结果体彩网:Cash-out Refinance: This option can help you access considerable equity in your home at one time. Keep in mind that you must make monthly payments to the lender if you take this route.
• Home Equity Loan or 澳洲幸运5官方开奖结果体彩网:Home Equity Line of Credit (HELOC): You can access a great deal of equity in your home by taking out a HELOC. This option also requires regular monthly payments. But, there may be fewer associated fees, making this a much less expensive alternative to a reverse mortgage or cash-out refinance. Another benefit is that you can secure a HELOC with your primary or second (vacation) home—or both if you choose to do so.

Whichever option you take, make sure that you stick within the residency rules for your first reverse mortgage and plan for the long term. While taking equity out of your properties might be attractive in the short term, you should plan carefully to♑ make sure that it doesn’t leave you short of money in the long term.

The Bottom Line

Many snowbirds have equity in two homes: their primary residence and their vacation home. A reverse mortgage can be a good way to access this equity, but you can ౠonly have one at a time. Reverse mortgages can be taken out only on your primary residence, meaning t♕he place where you spend the majority of the year.

There are other ways of accessing the equity in your properties, tꦺhough. These in♍clude a cash-out refinance or a home equity loan.