Reverse Mortgage FAQ: What’s a Reverse Purchase?
The beauty of the reverse mortgage loan is its adaptability. What began as a largely unknown option in the real estate in the 1960’s became a viable option for seniors in the 90’s when the Federal Housing Administration unveiled it’s FHA-insured reverse mortgage. Flashforward 20 years, and the reverse mortgage loan has become a viable option for seniors looking to supplement their retirement income or plan for future retirement.
In 2009, however, another option for homeowners made its way into the reverse mortgage program, the Reverse Purchase, which allows homeowners 62 years of age and older, who live in their primary residence and have enough equity in their home, the ability to buy a home using a reverse mortgage.
This came about in 2009 when the FHA noticed that many retirees would buy a home, and, in as little as two years later, would take out a reverse mortgage loan to pay off their monthly mortgage payments.
In truth, many retirees think about downsizing during retirement because the big home they lived in, when they started a family, is too big for their liking. Their kids have grown up, moved out, maybe even to another state, so it’s time to consider how much space they will really need during their retirement.
Whether you live in Florida, and are looking to downsize, or you are thinking about moving to Florida for your retirement, consider a HECM for Purchase. The fees associated with obtaining a mortgage as well as a reverse mortgage are considerably lower with a Reverse Purchase loan because both transactions are done simultaneously. There is no need to wait after buying a home to get a reverse mortgage loan.
The Reverse Purchase allows homeowners the ability to use the equity from the sale of their previous home to buy their next home. According to HECM for Purchase: Little Known and Often Misunderstood though, the Reverse Purchase remains in the shadows of the reverse mortgage program. As more “baby boomers” turn 62 years of age, and many live longer, the Reverse Purchase could be the “sleeping giant” of the senior real estate market.
By forgoing mortgage payments by using a reverse mortgage, retirees can comfortably retiree despite the volatile housing market. Home prices continue to rise, presently, so it is crucial not to wait any longer if you are hoping to apply for a reverse mortgage loan.
At PS Financial Services, a reverse mortgage company in Florida, we always work with our clients to find the best product for their personal situation. Whether you are looking for at a Reverse Purchase or any other product under the reverse mortgage program, PS Financial Services can help.
Be aware that while you cannot lose your home under normal circumstances, foreclosure may occur if you do not pay your taxes and insurance and otherwise comply with the loan terms.
If you think a Reverse Purchase is right for you or you simply want more information on the reverse mortgage program, let PS Financial Services know at (888) 845-6630 or email us at info@PSReverseMortgage.com.