Cachet Real Estate Finance, LLC

  • Home
  • About Us
    • Cachet’s Mission
    • Cachet’s Network
    • Accessibility Statement
  • Custom Home Loans
    • New Construction
    • Raw-Land Aquisition
  • Resources
    • Pre-Owned Home Loans
    • First Time Home Seller Tips
    • First Time Home Buyer Tips
  • Blog
  • Contact Us

Can You Use a Reverse Mortgage to Buy Your Next Home? Yes, and Here’s How

September 9, 2016 by Cachet Real Estate Finance

Can You Use a Reverse Mortgage to Buy Your Next Home? Yes, and Here's HowMost people who have been on the market for a home are familiar with what the term ‘mortgage’ means, but many have not heard of a reverse mortgage and aren’t aware of how this product can benefit them. If you’re nearing retirement and are contemplating a new home or even relocation to another community, here are the details on a reverse mortgage and how this option may benefit you.

What Is A Reverse Mortgage?

While many homeowners may not have the net worth to be able to buy another home without selling their current one, a reverse mortgage enables the buyer to borrow money against the value of their home. Created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM), this type of mortgage can enable those older than 62 to relocate to a new house or move closer to their family without having to sacrifice the money they’ve saved or their fixed monthly income.

What Are The Requirements?

Beyond the minimum age requirement of 62 years of age, those who would like to utilize a reverse mortgage must either own the current property they are living in or have a high amount of equity in the property. They must be able to pay all of the costs associated with ownership of the home and the property they are purchasing must be able to pass the standards held by the Federal House Administration (FHA). In addition, applicants will have to go through a financial assessment to ensure they can make insurance and property tax payments.

The Benefits And Drawbacks Of Reverse Mortgages

A reverse mortgage can be a great benefit in that it enables those who are in their senior years to purchase a new home without having to utilize a portion of their fixed monthly income. However, because a reverse mortgage includes this benefit, it also comes in tandem with a higher loan balance and this higher balance means that interest will accrue more quickly. Dependent on this amount, this can actually diminish the equity in the home.

While the opportunity for a reverse mortgage has been around for a number of years, this alternative for purchasing a home has not been utilized by many homeowners since its inception in 2009. If you’re approaching your senior years and are considering the benefits of purchasing a new home, you may want to contact your local real estate professional for more information.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgage, Reverse Mortgages

Safe & Secure Application

Any Questions?

  • This field is for validation purposes and should be left unchanged.

Connect with Us!

Our Recent Articles

  • Avoiding Home Buyer Remorse: 5 Tips for a Happier Homeowner
  • Evaluating Neighborhoods: 4 Things to Consider Before Purchasing a Home
  • Suffering in a ‘Low Inventory’ Real Estate Market? 3 Helpful Tips for Finding a Home to Buy
  • Should Your First Home Be A Starter Home Or Forever Home?

Privacy & License Information

  • Privacy Policy
  • License
  • HUD Booklets
Cachet Real Estate Finance, LLC
1526 McKinley Ave
San Antonio, TX 78210
NMLS #391557 | Equal Housing Lender

Copyright © 2022 · Powered by MySMARTblog