Using a Reverse Mortgage for Purchase…

Can be a unique and beneficial option for aging in place seniors.  A reverse mortgage for purchase is not your typical mortgage product.  It can be a very useful tool for retirees who wish to improve their “cash flow” during retirement years.  It can also provide more purchase power by allowing the retiree to retain additional assets as opposed to liquidating all funds to close.  Retained assets could be used for upgrades or home improvement projects.  Maybe a wwell-deserved vacation!

Using a Reverse Mortgage to Purchase can be advantageous due to the currently low-interest rates.  Lower the interest rates mean a higher Maximum Claim ( the amount you can borrow).  A larger reverse mortgage for purchase might be needed due to higher housing costs.  Eventually, those rates will rise.  Higher interest rates will reduce the amounts one can draw with a reverse mortgage.  If one’s portfolio is expected to mature in a number of years then it is possible that a reverse for purchase now would allow those assets to achieve its highest return.

There are still other potential benefits that a reverse mortgage for purchase may have for seniors depending on each individual circumstance.  Not everyone has a need for a reverse mortgage but for those who qualify it is an option that may be worth considering.

Purchase A Home with a Reverse Mortgage and Never Make a Mortgage Payment!

Reverse For Purchase

Additional Documents Needed

A HECM (Home Equity Conversion Mortgage) or Reverse Mortgage for Purchase requires additional documentation and qualifying criteria for approval.  Since this is a “Purchase” there are standard documents related to a traditional purchase transaction.  The following are just a few of those documents that will be required.

  • Purchase Contract
  • Escrow Instructions
  • Title Report
  • Earnest Money Deposit  (source of funds required)
  • Financial Assessment for Purchase (see “tabs”)

Typically 40% to 50% down
All funds must be verified
Minimum 3 months bank statement required
NO Gift funds allowed

Maximum DTI 43% (debt to income)
Single Family.
2 to 4 units as long as one unit is owner-occupied.
Condo – FHA approved
New construction – CALL for details
NO Flips

619-587-9765
I will walk you through the process!