Most people know about reverse mortgages as a way to tap into the equity of your home. But there’s another way borrowers can take advantage of reverse loans: by using it to buy a new home, according to Bankrate.
Why buy a new home?
Living with a restricted cash flow is one of the things seniors will need to make adjustments for once they hit their retirement years. But that can be tough if you’ve got a huge home. Maintenance costs alone could run your wallet dry as the Sahara. Not a scenario you want when you’re living on a fixed income. By using an HECM for purchase reverse mortgage, you can replace a big home with one that’s much smaller.
Benefits of a new home
A small home will require little to zero upkeep costs. You won’t have to pay astronomical energy consumption bills just to keep the entire home warm and toasty during the cold season or cool and comfortable during the sweaty, humid months ahead. No more hard-to-reach floors. You can go for a bungalow to for easy access to everything. You can even pick a home that’s closer to your family and relatives so you can live independently and still be close enough to your loved ones.
What do I need to know?
Make sure you fit the requirements for an HECM for purchase reverse mortgage. Moving into that new home with your spouse? Remember to put both of your names on the house’s title deed as well as on the reverse mortgage contract. That way, if anything happens, the surviving spouse won’t have to pay for the loan and instead could continue to live on the property, all while continuing to receive HECM payouts.
So explore the many ways a reverse mortgage can help you. Use it to buy yourself a new home.