Buy a Home with a Reverse Mortgage | A reverse mortgage for purchase may help some seniors finance a new place to live.
Most seniors take out a reverse mortgage to help them stay in their existing home as they get older. But Barbara, 67, took advantage of a little-known product: She used a reverse mortgage to finance a new home.
Barbara’s 83-year-old husband, Bill, was having trouble using the stairs in their two-story townhome in Chicago. The couple sold their home and used a “reverse mortgage for purchase” to move into a one-story house dream home in Arizona. “Now I take what would have been my mortgage payment and put it in savings,” says Barbara.
Watch this video to get a better insight:
As with a traditional Reverse Mortgage, a homeowner must be 62 or older to qualify for the federally insured Reverse Mortgage for Purchase. You don’t make mortgage payments while you live in the house, but the loan and interest come due when you sell, move out for 12 months or more, or die.
Borrowers generally get a fixed-rate, lump sum loan, which goes toward the house purchase.
Unlike a conventional Reverse Mortgage, the RM for Purchase requires a down payment, and for there to be equity to cover the accrued interest, the RM for Purchase requires that you pay about half the home’s sales price with your own cash. The reverse mortgage picks up the difference. “Essentially, the money you’re putting in is your equity,” says Parker Turk, CPA from Sun American Mortgage Company. (Sun American is one of the Farnsworth Companies)
Like any reverse mortgage, the older you are, the more money you can get from the program.
Sun American Mortgage Company is the leading and most experienced reverse mortgage provider in the state of Arizona offering reverse mortgages for more than 25 years.
Give me a call and we can discuss your options: 602-430-7200 or visit my webpage at: https://sunamerican.com/members/rexduffin/