Use a Reverse Mortgage to Purchase a Home!
That’s right! Older homeowners can use a Reverse Mortgage to purchase a new principal residence and downsize from their current residence, or relocate to other areas due to family, economics or any other reason.
A reverse mortgage for a Purchase is a Home Equity Conversion Mortgage (HECM) that allows older homeowners to purchase a new principal residence AND obtain a Reverse Mortgage in a single transaction. As with a traditional Reverse Mortgage, all homeowners must be 62 or older to qualify.
This can help more older homeowners relocate without a monthly mortgage payment. This option can certainly assist realtors and builders with sales and opportunities that may not be available with traditional lending. The no credit qualification will be changing at the beginning of 2014 but we are not sure of the exact guidance yet. My belief is you will see more and more reverse mortgages due to Baby Boomers lack of retirement savings and income.
Here is some good information from KCMBlog.com:
- Not only can seniors over the age of 62 use a reverse mortgage to access the equity in their current residence, in most U.S. states, they can also use the reverse mortgage to purchase a new home. This presents savvy agents specializing in the seniors’ niche with a unique value proposition and tool to list and sell more homes.
- As older adults with current reverse mortgages (many now in their 80’s and 90’s) are taking advantage of the up-tick in the market and liquidating their primary residence in search of senior living communities, their agent will be looked upon as their guide and expected to assist in navigating the reverse mortgage payoff.
- Because many older adults choose to age-in-place as long as they can, they often use reverse mortgages to make necessary home modifications. While some agents have a tendency to fall short at follow up during the sometimes extended sales cycle, those who introduce their senior adult clients to the reverse mortgage product are often appreciated and thus called upon first when it is time for the homeowner to make a move.