Using a Reverse Mortgage to Purchase a Home

by : Michael Branson

A Reverse Mortgage is a national program which typically is offered to homeowners 62 years and older but some private programs have recently been opened to borrowers down to 59 1/2 years old which allows the homeowner access to their equity in the form of cash, monthly income to the homeowner, or a combination of both with the homeowner never making another loan payment for life. The money the homeowner receives is usually tax-free and does not affect Social Security benefits or Medicare (check with your financial advisor for your circumstances). There are very minimal credit requirements and no income requirements to qualify, borrowers can even be in foreclosure and still obtain a reverse mortgage.

Did you know that if you are a senior borrower, aged 62 and over you can use a reverse mortgage to purchase a home as well as just to refinance your existing home? Many senior borrowers have heard about the benefits of paying off an existing mortgage with a reverse mortgage, that they never have to make another mortgage payment, but many are still unaware of the fact that they can also purchase a new home or second home using that same reverse mortgage.

This enables borrowers to purchase the home, you don't have to pay 100% cash for the home and you still never have to make a mortgage payment for life!

Many senior borrowers are set with their current homes and have no desire to move. However, there are also a growing number who need to downsize, have decided that their current home just doesn't fit their needs and can't easily be changed to do so(like wheel chair access or multiple stories) or have amenities that they wish to get away from that they no longer desire (like large lots with pools and excessive landscaping, etc). Some wish to keep their current homes but want a second home near children and grandchildren, near favorite activities, or in climates more favorable during certain times of the year. But with no steady income streams and the fear of starting again with mortgage payments, many have thought that they just can't buy the properties they want.

Some are almost in a position to buy these homes, but it would take all their available savings and they do not want to use all their funds. The reverse mortgage has become an excellent tool for these seniors to purchase the homes they desire without qualification requirements and with no payments for life all without having to pay for the homes outright.

So if you, a loved one or a client of yours are 60 or older and are looking to buy a new primary residence or second home or always wanted to downsize but never thought you could actually do it and still get a home you would be happy with, give a specialist at All Reverse Mortgage Company a call and let us show you how a reverse mortgage might be just the tool for you!