Did you know? Your Client Can Use A Reverse Mortgage to Purchase a Home!
What are the Requirements?
- Both Borrowers must be 62 years old or older
- Down Payment will be 40 to 50 Percent
What are the Benefits?
- No House Payments after Closing
- House Payment savings can be used to pay off debt, add to investment accounts, help cover living expenses
- Increases Monthly cash flows for budgeting purposes
What type of Client is a good candidate for a Reverse Mortgage?
- Any client selling a home and getting a lump sum of cash, and does not want to make a house payment
- Any client that has not had a house payment, sells their home and needs to purchase a home in a more expensive area, and they do not want to get a forward mortgage and make a house payment.
My clients were selling their Multistory home to move to a Ranch home. They were netting $105,000 Dollars on the sale of their home and were both over 62 years old. The home they were purchasing had a sales price of $200,000. They were going to to take the cash and pay off $40,000 in debt. Their house payment was going to be $1200 on a 30 year mortgage. Instead, with the Reverse Mortgage, they are going to put $95,000 down to do the Reverse, and take $10,000 to pay down debt. Since they are saving $1200 per month by not making a house payment, they are going to pay $1200 per month against they $30,000 debt and at the end of 2.3 years will have all the debt paid of and they can start investing the $1200 in an investment vehicle(savings, etc.) to help with retirement. Also, when they do retire, they will still not have a house payment of $1200. A great plan!