Get the Home You Want with a Reverse Mortgage
Traditionally, most seniors who take out a reverse mortgage do so in order to stay in their current home as they age. But that existing home may no longer be the ideal situation. Maybe the owner is an empty-nester and doesn’t need a large home, or the house maintenance and upkeep is too much of a burden, perhaps you are looking for your retirement dream home, or you just want to be closer to your children and grandchildren. No matter the reason, there is a reverse mortgage product, Home Equity for Purchase, or H4P, that allows homebuyers to borrow against the property’s equity.
Expanding Your Options
But the H4P doesn’t just help you buy a new home, it can help you get the home you really want for less cash out of pocket. Based on your age and location, as an example, a 62-year-old could get $200,000 towards a $400,000 home. Think about it. Your budget could increase from $200,000 to $400,000, giving you more home options to choose from – with no monthly mortgage payments. An older borrower might actually qualify for more funds because there is less chance the debt will increase beyond the value of the home.
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More on Getting the Home You Really Want
Unlike a conventional reverse mortgage, the H4P requires a down payment, approximately 39-59 percent. The loan still gets paid back at the end when the client is no longer living in the home, sells the home, or passes away. Though there are no monthly payments, you are still responsible for the property taxes, insurance, and any HOA dues, as well as responsibility for the upkeep and maintenance. The minimum age of 62 to qualify is still in place, and the home has to be your primary residence. The H4P program has limited income and credit requirements.
Taking out a reverse mortgage to purchase a new home, or a second home for that matter, is one of the most rapidly growing ways a reverse mortgage is being used. The H4P program could benefit retirees who are looking for homes and communities that meet their physical and social needs, and an effective way to increase cash flow and extend their nest eggs. To learn more about H4P, contact one of our reputable certified mortgage lenders in your area.
Learn more about how people are using home equity conversion mortgages for purchasing homes:
Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines.