Reverse Loan Mortgage Options in Florida

Premier Reverse Mortgage covers the entire state of Florida, so it doesn’t matter if you are located in Pensacola or Key West, we can help you! The process of obtaining a reverse mortgage is very similar in each state as HUD/FHA reverse mortgages are national products, but there are some differences that we will point out below.

Cost of a Reverse Mortgage in Florida
Florida Couple

What makes Florida somewhat unique in regards to reverse mortgage closing costs are the taxes on the transaction. One could make the argument that since there is no state income tax, the state makes up for it by charging higher taxes on real estate transactions.

The document stamp tax is $3.50 per thousand of the deeded amount. Unfortunately for reverse mortgages, the deeded amount is 150% of the appraised value or lending limit, whichever is lower. There is also an Intangible Tax that is $2.00 per thousand of the deeded amount.

The cost to record the reverse mortgage deeds is also significantly higher in Florida than some other states.

Property Types

Florida is somewhat unique in that many of the residences along the coast are condominiums. Condos are treated much different than single family residences and town homes due to the collective ownership of common areas. Ultimately, condos are a higher risk to HUD, so they require entire complexes become approved before lending to an individual unit.

Cooperative units — where the owner is a shareholder of a corporation that owns the buildings — are approved by HUD, but no guidance was ever established. Unfortunately, there’s no investor interest in this property type.

Insurance

When you take out a reverse mortgage loan, you are responsible for paying the property taxes and insurance on the property each year. Insurance costs in Florida can be higher than most of the country due to risk of hurricanes and wind damage. If you are in a flood zone, you’ll be required to carry flood insurance. If your homeowner’s policy specifically excludes wind, you would be required to pick up the extra coverage elsewhere.

Purchase Loans

It is common to see retirees flocking to Florida for the warm weather and sunshine. Instead of purchasing a property with cash and looking to do a reverse mortgage soon thereafter, it can be beneficial to use the reverse mortgage to acquire the property. The benefit is the savings on the title and state charges that will no longer be duplicated. There are other benefits, but they are situation specific, so speak with us today about purchasing a home in Florida with a reverse mortgage!

Occupancy

Many people have a home in Florida that they use seasonally, and then they return to their primary residences in other states. Unfortunately, for these folks, they cannot get a reverse mortgage on their Florida property until they make it their primary residence. That is defined as 183 or more days per year of occupancy. There are many state and federal lending laws that keep second homes from being eligible for reverse mortgage financing.