Reverse mortgages have traditionally been the method used by senior homeowners to access the equity in their homes without incurring a monthly mortgage payment. Payment of the debt created by a reverse mortgage is deferred until the property ceases to be the borrower’s primary residence. At MortgageDepot, we offer senior borrowers the ability to use a reverse mortgage to purchase a home through our reverse mortgage purchase program.
Reasons a reverse mortgage purchase loan makes sense
The home a couple lived in while raising a family might not be the best option for retirement. Some of the reasons for selling the family home include:
- Downsizing now that the children have moved out.
- Reducing repairs and maintenance costs with a newer home or condominium.
- Accommodating physical limitations.
Reverse mortgage loans give seniors the chance to buy a new home without adding a monthly payment.
Features of our reverse mortgage purchase loans
Among the features of a reverse mortgage purchase loan are the following:
- Loans are available for the purchase of existing single-family homes and properties with up to four units.
- Borrowers must take occupancy as a primary residence within 60 days following the closing.
- Amount borrowed is determined by the age of the borrower, interest rate on the loan and appraised value of the property.
The difference between the amount borrowed and the purchase price of the home usually comes from the equity from the sale of the borrower’s current residence, but it could also come from other sources, including savings and retirement accounts. Funds making up the difference between the reverse mortgage purchase loan and the cost of the property cannot come from refinancing a second home or investment property.