A reverse mortgage is a loan that’s usually secured by a residential property that enables the borrower to access the unencumbered value of the property. If you’re in the right situation, it’s an opportunity that can allow you to purchase a home without ever having to make a mortgage payment. To qualify, buyers must be 62 or older and the new purchase must become their principal residence. To give an example, let’s say a purchaser acquires a residence worth $500,000 and pays 60% of the total amount beforehand, which is $300,000. In the long run, they don’t have to make payments since the equity will suffice to cover the mortgage payments. Buyers are still responsible for paying the newly acquired property taxes and insurance. This type of mortgage is worth considering for seniors who have paid off their current home and intend to sell it to move into a more expensive one without financing it.
I know this sounds unbelievable, but we do many of these reverse-to-purchase loans. If you’re interested in learning more, please call Indigo Mortgage and schedule an appointment to meet in person today!