Reverse Mortgage for Purchase
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Learn how a reverse mortgage for purchase can enhance your life.
FAQs
Comparison to Other Options
Example and Basics
Thanks to the 2008 Housing and Economic Recovery Act, you can now purchase a new home and take out a reverse mortgage on that home in one transaction. By using a reverse mortgage on your new house to cover part of the purchase price, you can have more cash on hand because less of your money will be tied up in your new house. Plus, by purchasing the house and getting a reverse mortgage in one transaction, you will have fewer closing costs.
The most common scenario for using a reverse mortgage for purchase may be current homeowners deciding to sell their home and move in to a smaller one (downsizing). Here's an example:
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| Original house: $450,000 | Price of smaller house: $185,000 |
| - Reverse mortgage: $116,000 | |
| - Sale price of original house: $450,000 | |
| = Cash left over: $381,000 |
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Cash left over: $381,000 |
To see how a reverse mortgage for purchase might help in your situation, try our Downsizing Calculator.
Don't want to sell or not a homeowner?
If you do not currently own a home or if you don't want to sell your home, you can still use a reverse mortgage for purchase. The requirements are that you have the funds available to cover the purchase price of the new house, minus what you receive from the reverse mortgage, and also that the new house is your primary residence.
Some people who already own a home and who have other funds available, may choose to purchase a new home but keep the other house as a rental property to generate ongoing income.
Have Questions?
Call us anytime at 1-800-466-6394.
