If you’re 62 years or more, and planning on moving to be closer to your family or to downsize, you may qualify for a reverse mortgage purchase. A reverse mortgage purchase can help you purchase your next home where you do not have to pay mortgage payments. Here’s how.
What a Reverse Mortgage Purchase is
A reverse mortgage purchase or Home Equity Conversion Mortgage (HECM) is a type of mortgage where the buyers use their equity from selling their previous home plus the proceeds from the HECM. The buyer does not pay mortgage payments.
What Type of Properties Can You Buy?
You can buy a one to four-unit type of property. You must live in this home as a primary residence. For you to obtain an HECM on a home, the property must pass inspection and meet Federal Housing Administration (FHA) requirements.
How Much Money Can You Borrow?
The amount of money you can borrow depends on the age of the youngest person on the title work, the home’s appraised value, the home’s sale price, current interest rates, and the program’s maximum lending limit.
Can You Cancel the Reverse Mortgage Purchase if You Change Your Mind?
You can cancel the transaction any time before the closing date. You must, however, must notify all parties of the cancellation in writing.
What if Your Home Doesn’t Have Enough Equity to Cover the Purchase Price?
If the loan and the sale of your prior home doesn’t cover the total purchase price of your new home, you can pay off the remainder with money from selling other assets or money from retirement accounts, savings, and other bank accounts. You can’t use a home equity line of credit, car loan, or an investment property to pay for your home.
Contact Mortgage Investors Group today to find out if a reverse mortgage purchase is right for you.