If youâ€™re 62 or better, you can use a reverse mortgage loan to purchase a new home. A reverse mortgage loan gives you the opportunity to potentially increase your purchase power, while eliminating monthly mortgage payments as long as you pay taxes and insurance, and maintain the home.
Here are a few things a reverse mortgage loan could help you with:
*The down payment required is determined on a number of factors, including borrower(s)' age (and non-borrowing spouse's age, if applicable); current interest rates; and the lesser of the home's appraised value or purchase price.
**17 day close is based on receiving an appraisal within 10 days of ordering it with no contingencies.
James and Mary could continue to live in this $391,400 home.
They could move to a $600,000 home for $391,400 down with no monthly mortgage payments, except for taxes, insurance, and maintenance.
CLIENTS COULD SELL THEIR HOUSE FOR $391,400 AND PURCHASE A NEWLY
CONSTRUCTED HOME FOR $600,000.
*The information in this advertisement does not constitute financial planning advice. Please consult a financial planner regarding purchasing an annuity and your specific retirement plan.
Cindy could live in her current $400,000 home further away from her grandchildren.
She could downsize to a $375,000 home for $230,000 down that is closer to her grandchildren.
CLIENT COULD DOWNSIZE HER $400,000 HOME, PURCHASE A $375,000 HOUSE AND HAVE $170,000 TO SPEND ON AN ANNUITY.
The reverse mortgage will be held on the newly purchased home as your primary residence. The down payment you will need to bring to closing is usually between 30-70%.
The required down payment on your new home is determined on a number of factors, including your age or eligible nonborrowing spouse's age, if applicable; current interest rates; and the lesser of the home's appraised value or purchase price.
The money must come from your liquid assets (bank accounts, CDs, retirement accounts, etc.) or from the documented sale of other assets you may have (your present home for example).
Your down payment is higher initially because you will not be required to make a mortgage payment (except for taxes and insurance, and the home must be maintained). With a traditional mortgage, you would potentially lose more in cash flow over the years because of the consistently required payments.
Remember the reverse mortgage for purchase also can allow you to purchase a more expensive home than what you would otherwise be willing to commit to in payments for the next 20-30 years.