What is a Reverse Mortgage Purchase?
Other than the traditional Reverse Mortgage that allows a borrower to take advantage of the equity in their home there is also a Reverse Mortgage Purchase. A Reverse Mortgage Purchase allows a borrower(s) at least 62 years old to purchase a home (owner occupied only) and never have a mortgage payment! Borrowers are only responsible for paying the taxes, insurance and maintenance on the home. The amount of the down payment depends on the age of the borrower. The older the borrower is the smaller the down payment. Reverse Mortgage (HECM) purchases are subject to the same guidelines as a regular reverse Mortgage.
As with the traditional reverse mortgage it is not paid back until the house is sold or until after all borrowers have passed away. Their heirs then have up to one year to refinance or sell the home, pay off the mortgage and retain the proceeds. As with all reverse mortgages if the house is “upside down” neither the borrower nor their heirs are responsible for the deficit.
Reverse Mortgage Purchase Advantages
A huge advantage for the borrower who does not want a payment is he/she can buy more house for less money out of pocket and keep the rest for enjoying retirement.
For example, let’s say that you’ve sold your old home and netted $300,000 and are moving to Florida where you want to buy a home and have no payment (other than taxes & insurance).
Option 1) Buy a $300,000 house for cash.
Option 2) Buy say a $400,000 house, put less than $200,000 down and keep the other $100,000 to use however you wish.
Note that on a purchase the seller is NOT allowed to pay for buyers closing costs. As there are different guidelines on a Reverse Purchase so it is important to call Mike Brady for details.
Working with a Qualified Reverse Mortgage Purchase Lender
Though Sunrise Financial is licensed throughout the State of Florida it is my practice to meet “one on one” for all Reverse Mortgages in Bradenton, Sarasota, Port Charlotte, North Port, Anna Maria Island, Holmes Beach, Bradenton Beach, Longboat Key, Palmetto, Ellenton and Parrish. Basically all of Manatee, Sarasota and Charlotte Counties. We also serve Tampa, St. Petersburg, Hillsborough and Pinellas counties.
With 42 years experience and 30 plus years with the same lender you can trust Mike Brady to give you solid advice and superior service.