How a Reverse Mortgage Can Help You Buy a New Home

Now you can buy a home with no monthly mortgage payments.*

Are you a homeowner age 62 or older? If you’d like a home that’s closer to your family; one that’s more physically accessible; or one that’s rightsized for your needs now or in the future, a Home Equity Conversion Mortgage (HECM)—also known as a reverse mortgage—may be a great solution. Unlike a traditional (forward) mortgage—where the borrower receives money and is obligated to start repaying the loan right away—money you receive through a HECM allows you to purchase a new home without having to make monthly mortgage payments. * The loan is due only after the final borrower no longer lives in the home. *

Here’s an example: Rich, 71 years old, wants to downsize and eliminate his monthly mortgage payments. The purchase price of his next home is $350,000. Using the proceeds from the sale of his current home, Rich can provide a cash down payment of approximately $181,500 and use a HECM loan to cover the remaining cost of approximately $168,500. Through a reverse mortgage, Rich can purchase the new home and improve his monthly cash flow by eliminating monthly mortgage payments. He might even decide that he could afford some upgrades to make his next home his dream home.

No monthly mortgage payments isn’t the only advantage:

  • Compared to paying cash, a HECM allows you to keep more of your savings
  • The funds you receive from a HECM are not taxable income
  • You own your home, with full title and control of the property
  • It may be easier to qualify for than for a traditional mortgage
  • No repayment is required until the last borrower no longer lives in the home*

 

Questions? We’re here to help. Call Longbridge Financial at (855) 523-4326.

 

*Terms of the loan require you pay property taxes, insurance, utilities, and home maintenance costs.