Reverse Mortgage for Purchase
The Solution Your Client May Desperately Need
Today’s seniors face many daunting challenges managing their finances. With limited income and scarce retirement assets, the costs of buying a new home forces retirees to live in unideal situations, such as far away from loved ones, or distant from the services they need to thrive. A reverse mortgage for purchase could be the solution your client needs to achieve peace of mind.
What is a Reverse Mortgage for Purchase?
The concept is not as crazy as it sounds. The borrower must have a minimum of 50% equity, while the rest of the funds can come from the new reverse loan on the subject property. This means you can potentially double their home buying power. Once in place, the new loan functions like a regular reverse mortgage.
Qualifications – The Basics:
Unlike standard conventional mortgages, reverse mortgage purchases take the burden of strict qualification requirements off of your client. Standard reverse mortgage qualifications apply. As a consumer protection, the borrower will have to document sufficient income to ensure they are able to continue to pay property taxes, insurance and any other expenses of the property:
- No credit score requirements
- No income requirements (beyond payment of taxes and insurance on the property)
- No asset requirements
- Borrower must be 62 years or older
- Home must meet FHA property standards
- Other guidelines may apply
As long as the borrower occupies the property, they never need to make a single mortgage payment. Your client could potentially save thousands of dollars each year, and use those funds to invest in their quality of life.
If you have questions about a reverse mortgage for purchase, or other reverse products, please let us know! We would love to discuss this with you. For more information on how a reverse mortgage for purchase can be an asset for your clients, you can check out this video here from Reverse Mortgage Northwest, a division of Pacific Residential Mortgage.
Categories: PRM Blog