Reverse mortgages are a great way for Connecticut seniors to access the equity they have built into their homes. Thanks to recent legislation, seniors can now use a reverse mortgage loan to buy a home they do not own through a unique FHA-backed home loan.
The Home Equity Conversion Mortgage (HECM) in Connecticut was designed to make it easier and more affordable to seniors to buy a home. Instead of buying a home with a traditional mortgage, paying closing costs and then taking out a reverse mortgage on the home with an additional set of closing costs, the HECM program allows you to combine all of this into a single transaction.
There are several reasons a buyer may approach the seller to carry the mortgage in Connecticut, such as when interest rates are very high or the buyer cannot get approved through a bank. There are a few ways to do a seller carry-back, including the seller carrying 100% of the financing when the home is paid off. The borrower may also be able to get a conventional mortgage for some of the purchase price and request that the seller finance the remainder. The seller can also allow the borrower to take over making loan payments, with the loan remaining in the home seller's name.
As a seller, you can enjoy many potential benefits by agreeing to a seller assisted mortgage in Connecticut. There are also many reasons you may consider this option such as:
There are downsides to carrying the Connecticut loan for a buyer. If the buyer defaults, you will need to go through the foreclosure process which is very expensive. You may even be left with too little equity after you are forced to make up back payments, or pay commissions and closing costs to sell the home. You will also be leaving money tied up in the property.
Connecticut Sellers also have the option to convert a seller carry-back into cash by selling the loan to a private investor. Bear in mind, this is typically done for less than face value. You can expect to lose 10-30% of the unpaid balance if you choose this option.
Home buyers also stand to enjoy many benefits with a seller-assisted mortgage in Connecticut such as: