Are you a senior citizen thinking about purchasing a new home? You may be able to transform the equity you have established in your current home into the opportunity to live in a new home with no additional mortgage fees. A reverse mortgage for purchase is a unique financing option that allows home buyers of a certain age to move into a new home and acquire a reverse mortgage in the same purchasing deal. Dan Turner from Geneva Financial, is a mortgage specialist who can help you determine if a reverse mortgage for purchase is the right financing option for you. We serve clients throughout Hawaii, Illinois, and Ohio. Contact us today for a consultation.

Reverse Mortgage for Purchase Basics

A reverse mortgage for purchase is also sometimes referred to as an HECM for purchase. The U.S. Department of Housing and Urban Development created the Home Equity Conversion Mortgage, (or HECM), and it is funded completely through private lenders, but is regulated by the federal government.

A reverse mortgage for purchase essentially allows home buyers who are 62 years of age or older to purchase a new primary residence using the loan revenue from a reverse mortgage. The difference between a reverse mortgage and a reverse mortgage for purchase is that in a reverse mortgage, the homeowner turns over equity in their own home in exchange for monthly payments. In the case of a reverse mortgage for purchase, however, the reverse mortgage funds go towards purchasing a new home, and the buyer enters into a new mortgage contract. Payments on the new loan are deferred, and the borrower is then able to live in their new home without paying monthly mortgage fees.

Under a reverse mortgage for purchase, a homeowner is allowed to live in the new home until death, or until they opt to terminate the contract by moving or paying off the loan. In the event of the borrow passing away, the family has the opportunity to pay off the rest of the loan and keep the property, or the home can be sold to pay off the remaining balance of the loan. Even if the home is sold for less than the remainder that is due, the debt is considered settled, and the family will not be held responsible for the rest of the cost.

What Are the Eligibility Requirements for a Reverse Mortgage for Purchase?

To qualify for a reverse mortgage for purchase, there are several eligibility requirements to consider, including:

• You must be at least 62 years old
• You must live in the newly purchased home as your primary residence
• You must have a substantial down payment and enough equity in the home
• You must be able to pay for supplemental living expenses, such as homeowner’s insurance and property taxes

Starting Fresh With a Reverse Mortgage For Purchase

There are several reasons to consider applying for a reverse mortgage for purchase. Some home buyers want to move in order to live closer to their family, some desire to live in a home that is more accessible to their needs, while others would basically like to start a new beginning in a different home. Dan Turner from Geneva Financial can help determine if a reverse mortgage for purchase is the right loan for you, and guide you through the process of searching for your ideal home. Contact us today if you are looking for a home in the regions of Hawaii, Florida, California, Washington, Illinois, or Ohio.