Buying a House with a Reverse Mortgage Purchase
Not all borrowers need a reverse mortgage to increase retirement income. In some cases, it can be more important to you to move than to stay in your current home. In that case, a reverse mortgage purchase may be right for you. A reverse mortgage purchase can be a great way to move into a more fitting home as you age, without having to add the burden of a new mortgage.
At Citizens Lending Group, we want you to have access to all your options when it comes to reverse mortgages, so we have prepared this explanation of reverse mortgage purchase options available to seniors. Contact us today to learn more about reverse mortgage requirements and how a reverse mortgage purchase works.
How a Reverse Mortgage Purchase Works
In a traditional reverse mortgage, a borrower is able to take out a loan against the equity they have in their home from paying down their mortgage, or an increase in property value. Rather than paying the loan back in monthly installments like a traditional mortgage, the reverse mortgage only has to be repaid when you leave the home or sell it. In this way, you are able to take advantage of the equity in your home while you continue to live in it.
A reverse mortgage purchase is similar and different from the process described above.
While the reasons for wanting to buy a new home in retirement can vary, the best method to do so is perhaps universal: a reverse mortgage purchase. You may want to move to California or Florida for better weather. You may need a smaller, single level home in Pennsylvania as you age. Whatever the reason, one thing you do not need is another set of mortgage payments to make. A reverse mortgage can save you money in this situation in a number of ways.
First, you save money on closing costs because the reverse mortgage covers both the sale of your current home and the purchase of your new home.
Second, you save money by being able to downsize from a home that may be too big for your current needs. Heating and cooling, maintenance, lawn care, and homeowner's association fees are all costs that may go down in a new home.
Third, a reverse mortgage purchase allows you to buy a new home without having to make new mortgage payments. You only have to pay off the reverse mortgage when you sell your home or pass away. As with a typical reverse mortgage, a reverse mortgage purchase requires that you prove the ability to pay taxes, upkeep, and other costs from your existing income. This helps ensure that there is no risk of over-borrowing.
Contact Us to Learn More About Reverse Mortgage Purchases
It is important to know all the risks and benefits of a reverse mortgage before signing up for any type of loan agreement. In California, Florida or Pennsylvania, contact us at Citizens Reverse Mortgage today to learn more about reverse mortgage requirements and if a reverse mortgage for purchase is right for you.