subject: 5 Tips Why Smart Reverse Mortgage For Purchase Makes It Possible To Relocate [print this page] The seniors 62 and over can use HECM or Home Equity Conversion Mortgage program to finance this project, which they have to use as their primary residence. They can buy a new home with the reverse mortgage for purchase with zero monthly back payments. Altogether 3 seniors can become borrowers.
1. With Limited Income It Is Important To Move Without New Monthly Mortgage Payments.
Many seniors are cash poor but equity rich, meaning that they do not have sufficient cash for daily purposes and their only assets are the equities of their homes. The reverse mortgage for purchase works in that way, that if a senior has an old, traditional mortgage left, it must be paid away with the reverse loan. This releases a nice sum of cash for other purposes.
The reverse loan will be paid away after the running time, i.e. when a borrower will move away and sell the home or will pass away. Then the home is sold and the selling price, or part of it, will be used to pay away the loan capital, interests and the fees. A borrower has to take an obligatory mortgage insurance, which guarantees that no other assets outside the home will be used to pay the reverse loan back.
2. A Senior Can Release Cash By Using The Reverse Mortgage.
If a senior will buy a new home with the reverse mortgage for purchase and sell the old home, he has a great opportunity to put some cash aside for other purposes, plus if he has a traditional mortgage left, he can get more disposable cash every month.
3. The Present Home Is Not Good For A Senior.
Maybe it is too big, old fashioned or includes several floors. Or maybe it is hard to maintain or it is costly to run. A new is always new and especially the seniors deserve high quality homes. When the life situation has been changed it is wise to pick the home, which fulfils all the needs.
4. The Downsizing Leaves Money For Other Purposes.
Many seniors will downsize their homes, when they relocate. This means, that they sell their old homes, use a part of the price for the downpayment and finance the rest with the reverse mortgage for purchase. This gives them new homes plus some reserve money.
5. A Senior Can Get A New Home Plus Additional Cash Money.
In some cases the seniors use the reverse loan for downsizing by buying new homes, because the old ones will meet some big repairs or maybe the taxes will be raised. The reverse mortgage purchase helps by giving an opportunity to get a brand new home without any monthly payments and to get rid of the oldfashioned home. Note, that HECM accepts only one unit homes.
