Use a Reverse Mortgage Loan to purchase a home?
(Note - this may not be available in all areas)
Sure! With a HECM* for Purchase, the initial downpayment is your established equity in the home. The minimum downpayment is determined by a number of factors, including your age, or eligible non-borrowing spouse's age, if applicable, interest rate and the lesser of the home's appraised value or the purchase price. No monthly mortgage payments are required thereafter. Taxes, homeowners association dues, if required, and homeowners insurance must be kept current and the home must be maintained. As long as all loan terms are met, the loan is not required repayable until the last surviving borrower, or non-borrowing spouse, no longer lives in the home as his/her principle residence.
*Most, but not all, reverse mortgages today are federally insured throught the Federal Housing Administration's Home Equity Conversion Mortgage (HECM) Program. This advertisement talks about HECM loans only.
Here are some scenarios you may consider:
1) You would like to downsize AND increase your monthly cash flow.
2) Downsize using a HECM for Purchase PLUS use some of your additional equity proceeds from the sale of your current home to purchase another property in a warmer climate. You must live in your primary residence, the one you acquired using a HECM for Purchase, over 6 months of the year.
3) What if I want to build? YES - you can use a reverse mortgage to purchase new construction as well. Contact us for more details!
4) Sadly, divorces do happen to seniors. With the use of a reverse mortgage, the spouse who chooses to stay in the home may be able to do a HECM Refinance and use the available funds to pay the ex spouse for their "half." This spouse could then use "their half" to purchase a home of similar value using a HECM for Purchase! This is just one of several options that could work to resolve some complications of a "silver divorce."**
** This advertisement does not consititute legal advice. Please consult an attorney for your specific situation.