Homebuying with a Reverse Mortgage
Learn How Seniors Can Retire Where They Really Want to Live
Do you want to live closer to family in a more accessible home or somewhere you like to vacation? When you buy with a reverse mortgage, your options improve.
Here’s How Homebuying Works with a Reverse Mortgage for Purchase (H4P)
Boost Buying Power
With an H4P, you combine the proceeds of your current home with the proceeds of a reverse mortgage to buy a new home. At Retire Right Mortgage, we’ve boosted our clients’ home buying power by up to 200% with an H4P!
Enjoy HECM Advantages
Just like with any Home Equity Conversion Mortgage (HECM), you don’t have to make monthly mortgage payments ever again, and you will never owe more than the home is worth. Simply pay taxes, insurance, applicable association dues, and maintenance costs.
Basic Qualifications
–Age 62 or older
–Home is primary residence
–Able to pay property charges
–Counseling with a HUD-approved agency
–No delinquent federal debts
–Able to make down payment
Here Are Two Very Common Homebuying Scenarios:
Moving to a Home That’s Significantly
More Expensive
Tony and Silvia are both 69 years of age and they are proud grandparents. They would love to move to where their family lives, but properties are much more expensive than their current location. Their primary residence is worth $600,000. The equivalent home in their family’s area would be $800,000.
With a traditional mortgage, they could sell their current $600,000 home, significantly downsize, and cover the difference with their savings and other assets.
Or they could buy with a reverse mortgage for purchase (H4P). Their sale proceeds could be applied to the down payment and closing costs, and the proceeds from the reverse mortgage would cover the difference.
In the end, Tony and Silvia could own an $800,000 home closer to their family and never have to make monthly mortgage payments again. They would only have to cover property charges that they already have to pay, such as taxes, insurance, applicable association dues, and home upkeep.
Moving to a Home That’s Less Expensive
Terry is 67 and owns her home outright. It’s a large property valued at $800,000. While she loves her home, it’s way more house than she needs and the maintenance and cleaning has become burdensome, both financially and physically.
She’d like to move to a smaller new construction home that costs $650,000. Terry could simply sell her home and use the proceeds to buy the new home.
Or she could buy her new house with an H4P. She would put the reverse mortgage proceeds toward the cost of the new home, and use profits from the sale of her current home to cover the difference.
She would own her new home and have about $375,000 left over to use as she pleased. That’s about $225,000 more than she would have if she paid cash to buy her new home.
Terry would never have to make monthly mortgage payments again. Instead, she would only have to cover property charges like taxes, insurance, applicable association dues, and home upkeep.
*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation. The homeowner is still responsible for paying property taxes, homeowner’s insurance, applicable association dues, and for maintaining the property.