While many retirees have little desire to leave their homes, others may be excited to create new memories somewhere else. The nest is empty, there may be too many stairs, and it may just be time to start a new chapter. A smaller, cozier, and age-appropriate home may seem appealing to many retirees. Let’s take a look at how you can buy a home with a reverse mortgage and how doing this can benefit you.
Established in 1988, The Home Equity Conversion Mortgage (HECM) for Purchase was created specifically for the benefit of seniors. This reverse mortgage allows persons aged 62 and over to purchase a new principal residence using cash gained for their reverse mortgage.
Most people are not able to buy a home in cash and that’s why mortgages exist. However, a traditional mortgage is usually only accessible to persons within a certain age group. If you’re a retiree and you want to purchase a new home, buying a home with a reverse mortgage may be the most feasible way to do it.
Using a reverse mortgage to purchase a new home will allow you to accomplish two goals with one transaction – attain a more fitting principal residence and a reverse mortgage all in one go. This process also helps you to save money because you only pay one set of closing costs. Closing costs can definitely add up to be a hefty expense at the end of the day. Complete two business transactions, for the price of one with a HECM for Purchase.
Buying a home with a reverse mortgage takes a few simple steps, let’s take a look at them below:
For some retirees, the biggest benefit of buying a home with a reverse mortgage is being able to completely avoid monthly mortgage payments, unlike a traditional mortgage. Using a reverse mortgage to purchase a new home is great for senior borrowers who have a fixed income but would like to attain a new home.