a Reverse Mortgage to Buy a Home
We were recently educated on the fact
that seniors can use a reverse mortgage to buy a new home. Suppose
you wanted to use all cash to buy but were limited to a budget of
$100K. The properties for $100K are practically nonexistent, and
the homes you really like are closer to $200K. A reverse mortgage
may be the answer.
Reverse mortgages are basically collateralized
loans - you must have enough equity in the property as security
for the lender.
For example, you would like to purchase
a $250K home but will only net $125K after the sale of your current
home. If you are at least 62 years old, you may qualify for a reverse
mortgage loan. The older you are, the less equity required in the
This is possible because in 2009,
the Federal Housing Administration introduced a new product called
the Home Equity Conversion Mortgage for Purchase, or HECM. We are
discovering that not many people (including ourselves) know about
Key Points to Consider:
- The minimum age is 62 years old.
- Borrowers must own the property
outright or have a considerable amount of equity in it.
- The home must be the borrower's
- The borrower must be able to pay
the home's property taxes, insurance premiums, homeowner association
dues and any other ongoing property costs.
- The borrower must have no delinquent
Eligible dwellings under HECM
- Single-family homes.
- Two- to four-unit homes with one
unit occupied by the borrower.
- Condominiums approved by the U.S.
Department of Housing and Urban Development.
Disclaimer: We are not mortgage
brokers so this is not our area of expertise. However, we know many
mortgage specialists who can assist you in this area. Please call
760-730-9300 or email@example.com
for a contact.