subject: How Does A Reverse Mortgage Work! Can Senior Buy A New Home [print this page] Yes it allows! The idea of this loan is to help seniors, whos living conditions have changed. These changes can be financial ones or family issues. Main reasons to changes are the decrease in the incomes and the children, who have moved away. I will go through how does a reverse mortgage work, when a senior wants to change a home.
1. The Need To Downsize Your Home.
This is one typical need, when the children have moved away and a senior is living alone in his home. Many seniors cannot anymore maintain big houses and see them too expensive. When a senior thinks the reverse loan, the downsizing is one of the many benefits.
To downsize brings another great benefit. The living costs will decrease, because modern flats and houses are more economical ones. A senior can also equip his apartment or house with new aids, which are especially planned for senior people.
2. You Can Move Closer To The Friends.
One benefit is, that it offers a chance to move closer to your friends and at the same time to improve your financial situation. In this case a senior can get two new benefits, which both give him more money every month.
3. You Can Get Lower Monthly Expenses.
A need to buy a new home comes very often from the financial situation of the senior. He just have to change into cheaper home. But how does a reverse loan work in this case? Well, actually it offers two potential benefits. A benefit from the cheaper home and a benefit from possible cheaper interest rate.
These both benefits mean lower monthly expenses, not only as to the loan management but also as to the living costs. The smaller and modern homes are more economical ones and thus lowers the living costs.
4. The New Home Purchase Loan Helps.
This new rule came effective in January 2009. It helps especially those seniors, who have bad credit information or not sufficient monthly incomes, or both. There are several senior Americans, who want to move closer to their friends or relatives or just to downsize their homes.
The normal reverse loan does not offer this opportunity, but the new reverse mortgage purchase loan does.
It also offers an opportunity to make some extra income, because the new rule determines, that when you apply for the new reverse purchase loan, the appraised value of your present home will be used, when the down payment will be decided. You can even avoid the down payment. This new reverse mortgage purchase loan is federally insured.
