Are you thinking about purchasing a new home? Did you know you can use a reverse mortgage to purchase a new home and not have to pay a monthly mortgage payment on that home for as long as you live there? You just need to stay current on your homeowners insurance, property taxes, and home maintenance.
If you’re interested in learning more about this reverse mortgage product, read on to get the basic facts.
How a Reverse for Purchase Works
- You use the reverse mortgage to purchase a new home.
- You are not required to make payments on the reverse mortgage until it comes due.
- You remain the owner of your new home.
- The amount you qualify for is based on the equity in the home, the age of the youngest borrower, and current interest rates.
Reverse for Purchase vs. Reverse Mortgage
The traditional reverse mortgage and reverse for purchase are alike in many ways. Here are the ways they are different:
- You use your reverse mortgage proceeds for anything you want. You use your reverse for purchase proceeds to purchase a new home.
- The reverse for purchase has additional eligibility requirements.
- There is an additional step in the process that includes getting a purchase agreement.
Reverse for Purchase Requirements
- You must be a homeowner who is 62 or older.
- You must have enough equity in the home.
- You must have a substantial down payment on the new home.
- The new home must be your primary residence.
When the Loan Comes Due
- The loan comes due when you move out of the home, sell the home, or pass away.
- If the loan comes due when you pass away, heirs can sell the home, purchase the home, or walk away from the home.
Reverse for Purchase and Non-Recourse
- You’ll never owe more than the home is worth.
- If the home sells for less than what is owed, FHA-insurance pays the difference.
- Protection against declining home values.
Benefits of a Reverse for Purchase
- You can live in a new home with no monthly mortgage payment.
- You may be able to increase your purchase power.
- Your name stays on the title. You remain the owner of your home.
- It does not affect your social security.
Reasons to Get a Reverse for Purchase
- Downsize to a smaller home.
- Move into a home that better suits your physical needs.
- Move closer to family and friends.
- Move to warmer climates.
- Move into your dream home.
- Move into an existing home or a new construction home.
One Reverse Mortgage started offering the reverse for purchase in 2013. Since then, we have helped many clients move into a new home and enjoy retirement without a mortgage payment. If you want even more information on this reverse mortgage product, we offer an informational guide specifically for the reverse for purchase. It includes all of the facts, a few examples of how clients have used it, and answers to common questions. Give one of our licensed specialists a call today to get yours.