![]() Many borrowers determine that they need to move later in life or really would like to move but find that their income may be insufficient for a conventional loan, so their ability to pay for the home that they would need/want to purchase may be limited to an all-cash transaction, thereby limiting their selection.īorrowers often look at homes in retirement communities, homes closer to family or friends, medical or other needs, or just homes that better meet their needs. Why would 62-year-old borrowers be interested in a purchase reverse? With a purchase reverse mortgage, even with younger spouses, you never have to worry about not receiving all the reverse mortgage proceeds. Therefore, should the borrowing spouse predecease the non-borrowing spouse, there are no unused funds on the line to which the non-borrowing spouse would not have access. So, unlike the line of credit option on a refinance transaction, where a non-borrowing spouse may not have access to remaining funds if something happens to the borrowing spouse before the line of credit is exhausted, the entire available line is used from the start. ![]() With a purchase reverse mortgage, borrowers use 100% of their eligible loan amount from the start of the loan to purchase the property. With the advent of the purchase reverse mortgage, borrowers age 62 and over* can use the loan to purchase a new home and pay off an existing lien or extract equity from a property they already own.Ī younger spouse who also lives in the home and is on the title and agrees to the terms of the reverse mortgage (must live in the property, agree to pay the taxes, insurance, and any property charges on time, and reasonably maintain the property) is not a borrower on the loan but is known as an “ eligible non-borrowing spouse ” and can also live in the property for life without making a monthly payment on the loan – even if something happens to the borrowing spouse. Before this announcement, the reverse mortgage was used solely to refinance existing homes. In 2009, HUD announced the availability of reverse mortgage loans for purchase transactions. About Reverse Mortgages for Home Purchase
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