Are you over 62 and looking to eliminate a mortgage payment or purchase a new home in the U.S. Virgin Islands? If so, a reverse mortgage might be the perfect product.
If you live in the U.S. Virgin Islands and are over 62 years old, you may be able to qualify for a reverse mortgage that will allow you access to your home equity or purchase a new retirement home.
The islands of St. Croix, St. Thomas and St. John, located in the Caribbean to the east of the Dominican Republic, are a popular destination for U.S. travelers for their tropical climate, beaches and island living.
Because the Virgin Islands are a territory of the United States, borrowers are eligible to receive a reverse mortgage through the U.S. Department of Housing and Urban Development (HUD). While there are several lenders who offer reverse mortgages in the U.S., there is just one lender approved to work with borrowers in the USVI: (reverse.mortgage / All Reverse Mortgage).
What Are My Reverse Mortgage Options in the USVI?
A reverse mortgage insured by the Federal Housing Administration in the USVI comes with all the same benefits and requirements of the loans offered in the U.S.
When you take out an FHA-insured reverse mortgage, borrowers pay an upfront and annual insurance premium as part of the loan. By paying the premiums, you are protected to ensure that you and your heirs will never owe more than your home is worth.
A borrower cannot lose his or her home as long as they he or she keeps up with homeowners’ insurance and property taxes.
When taking out a reverse mortgage in the USVI, you will have several options including a fixed or adjustable rate reverse mortgage.
The fixed rate reverse mortgage requires that you take out all the funds at closing, while the adjustable rate product gives you a credit line that can grow over time.
Can I Purchase a Home in the USVI?
Another benefit of the FHA reverse mortgage is that it allows you to purchase a new home in the Virgin Islands. Here’s how it works: You sell your old home, take out a reverse mortgage on the new one, and eliminate mortgage payments all within a single transaction.
While it’s not the most common reverse mortgage product, it can be a good way for retirees to downsize or purchase a new retirement home in a more suitable location.
Retirement in the Islands
The combined population of the three islands is about 106,000 according to 2010 U.S. Census data. It depends heavily on tourism and the cost of housing compares roughly with the cost of housing in the Washington, D.C. metro area, as indicated in a recent study conducted by the USVI Bureau of Economic Research.
Reverse mortgages in the USVI are fairly new, so it’s important to work with a lender that understands how the loans work on the islands.