Homeowners have a variety of home loans available to them to refinance their home or help them buy a new home. According to Reverse Mortgage Purchase, many homeowners may be familiar with a traditional reverse mortgage, but what they don’t know is that a reverse mortgage can be used to buy a new home. Reverse mortgages, also known as Home Equity Conversion Mortgages (HECM) or reverse mortgage loans, can help a homeowner buy their dream home or downsize to a home that is more suitable for their needs.
Many homeowners especially seniors have significant equity in their homes. According to consumer finance, approximately 65% of people who are 65 or older are mortgage debt-free. However, many seniors are struggling to buy or refinance their home because they are at risk of outliving their money. Some are relying on social security, personal savings, pensions, and other income to fund their retirement expenses.
Consumer finance reports that there are a variety of loans which allow you to tap into the equity in your home and help you buy a new home. A reverse mortgage is one of those loans. Here’s everything you need to know to help you buy a new home with a reverse mortgage.
What Is a Reverse Mortgage Loan?
According to Reverse Mortgage Pros and Cons by the Balance, “a reverse mortgage (Home Equity Conversion Mortgage) is a type of mortgage that allows homeowners to borrow against the equity in their primary residence” Retrieved from https://www.thebalance.com/purchasing-a-home-with-a-reverse-mortgage-3960734
Borrowers must be at least 62-years-of-age or older to qualify. No repayment of the mortgage (principal or interest) is required until the borrower dies, moves out of the home for more than 12 months, or sells the house.
The Benefits of Using a Reverse Mortgage to Purchase a Home
Fort Lauderdale Reverse mortgages are commonly used to help seniors and retirees to stay in their homes as they age and to improve themselves financially. A reverse mortgage provides the homeowner or borrower with a certain fixed-rate that is applied to the purchase of their home. The money seniors or retirees received from this type of loan will not affect social security payments or Medicare benefits and can be used to add income or pay for outstanding medical bills, travel expenses, a home remodel. To qualify for this type of mortgage, you will need to meet the following requirements:
- Be at least 62 years-of-age or older
- Be current on all property taxes
- Have zero liens on the property
- Have equity in the home
Why Reverse Mortgages Can be Good for Seniors
Unlike traditional mortgage loans, a reverse mortgage has no monthly payment requirements. This allows the borrower to buy a home without needing to decimate their retirement savings or other income to make regular monthly payments. The loan also provides seniors with the opportunity to purchase a home that is better suited to their needs or a more desirable retirement location.
Let NHL Lending Help You Secure Your Financial Freedom with a Reverse Mortgage Loan
When it comes to choosing a mortgage loan company, they’re many that don’t have your best interest at heart. Selecting a company which meets your standards takes time and research. You want to ensure you choose a mortgage company who cares for you like our lender’s will. At Kloze, our lenders go the extra mile to make sure you are comfortable and satisfied with the whole loan process.
We’re dedicated to helping you find the best loan possible for your situation. Come into any of our locations in Miami, Jupiter, or Fort Lauderdale to speak to one of our many representatives and see which type of loan is best for you. Give us a call at (888)995-6624, and we can get you started on the right path.