Home Purchase

Reverse Mortgage: The Key to Staying in Your Home — Or Buying a New One

As Baby Boomers hit their retirement years, the number of households headed by those age 62+ is surging. And for 91% of Americans age 50 to 80, they want — and expect — to spend their retirement years in their own home.

But what if that home isn’t quite right for your needs? Maybe you prefer a house with no stairs, fewer bedrooms or one that’s closer to family. Perhaps you just want to settle in a warmer climate, or a community with better amenities, such as public transportation, and/or more social opportunities. As a retiree, it might be just the right time to buy the home that checks everything off your list.

Whatever your thinking, you want a new home, but not the financial burdens that come with it. That’s why more and more Americans age 62 or older are using a financial tool called a reverse mortgage to purchase a “right-sized” home for their retirement.

The lesser-known advantage of a reverse mortgage

The reverse mortgage home financing program is designed specifically for homebuyers who are age 62 and older. It gives borrowers the funds to buy the home they want or need at this point in life, with fewer financial worries and limitations.

Many borrowers know reverse mortgages as a loan option that lets older homeowners tap into the equity they’ve built in their current home, eliminate monthly mortgage payments and free up funds for enjoying their retirement. But most people don’t know that you can also use a reverse mortgage to buy a home.

Increased awareness of this home financing option has made “reverse mortgage for purchase” a growing trend with many older Americans who are searching for a home that will suit them for the duration of their retirement. For many, it’s a more suitable option than paying all cash — which would deplete a significant portion of their nest egg — or financing with a traditional mortgage, which requires monthly principal and interest payments that can become burdensome in the future.

North Carolina resident Herb Godwin discovered the benefits of a reverse mortgage loan when he started exploring nearby 55+ developments. His contact at one of the communities he was interested in suggested he consider a reverse mortgage and put him in touch with the locally-based loan specialist from Reverse Mortgage Funding.

“I was looking to downsize,” says Herb, but at age 73 the last thing he wanted to worry about was making mortgage payments. A smaller home, no yard maintenance, and flexible monthly payment options made the reverse mortgage for purchase an appealing option, so he made the decision to move to his preferred community that was under development nearby.

“A reverse mortgage was the way around having to make monthly mortgage payments at this stage of my life. I paid off my existing mortgage and used the balance of the funds to finance a new home,” according to Herb. He was also able to delay having to tap into his retirement savings and investments, so they can continue to earn interest and dividends for as long as possible.

While no monthly mortgage payments are required with a reverse mortgage, as with any mortgage you still have to meet your loan obligations of keeping current with property taxes, insurance and maintenance.

Not yet 62? You’ve got options, too

An Equity Elite Reverse Mortgage is another important loan option for eligible homebuyers as young as 60.^† It’s available exclusively through Reverse Mortgage Funding LLC (RMF) as the lender. If you want to purchase a higher-value home, you can access more equity compared to a HECM for Purchase — up to $4 million. Also, more condominiums qualify with Equity Elite.

Both Equity Elite and HECM for Purchase offer a flexible repayment feature, so you choose to pay as little or as much as you like each month — or make no monthly loan payments at all — as long as you continue to live in your home. As with any mortgage, you must meet your loan obligations: keeping current with property taxes, insurance  and maintenance.

Find your home sweet home

Though not the right option for everyone, a reverse mortgage can help qualified borrowers maintain your retirement savings, improve cash flow, and more easily afford the home you’ve envisioned.

Want to learn more? Read our free HECM for Purchase guide, or call Reverse Mortgage Funding LLC (RMF) at 888-277-1567 to set up a convenient in-person appointment with one of our experienced loan specialists. You may just discover that a new home is more easily within your financial reach after all!

This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating;* a 5-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.

*This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

^†Not applicable in all states; some states may impose a higher age requirement. For details visit www.reversefunding.com/equity-elite.

Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.

Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have 90 days to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite reverse mortgage upon the borrower’s death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider a FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details).  Under the Equity Elite reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity event, as specified in the Security Instrument, occurs.

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