When looking forward to retirement you may realize that you no longer need the large house your raised your children in. It has been a home and a great investment. Looking forward you may realize it would be better to have a single story home, that you no longer need to live in that great school district, or you don’t want to care for such a large property.
Consider downsizing to an apartment or purchasing a smaller home using a RM for purchase. A reverse mortgage for purchase (HECM for purchase) allows homeowners over 62 years old to purchase a home directly using a reverse mortgage thereby avoiding double fees when purchasing a home and then refinancing into a reverse mortgage.
APARTMENT VS. SMALLER HOME
Small down Payment/Security Deposit 50% or less down payment (based on age)
Required Rent Payments for Life No mortgage payments
Required payments will increase over time No mortgage payments
Restricted on how you can use it You are in control – You own the home
No Equity gain – no equity to pass to heirs Great equity gain – remaining equity passes on to heirs
May be forced to move if rent increases too much No mortgage payments – never forced to move
May be on 2nd story Choose home with single story/easy access
Shared walls/Privacy/Noisy No Shared walls/complete privacy
Given the choice, most people would prefer to continue having the freedom that being a homeowner provides. Unfortunately, the larger home may require too much maintenance or costly upkeep, thereby draining ones finances. Upgrading to a smaller home can get you a newer, lower maintenance home, and free up the equity locked in the large home. This is also a great time to prepare for the future by changing to a single story home that will be more user-friendly for the future. If you would like more information on purchasing a home with a reverse mortgage feel free to use our HECM for Purchase calculator here or call toll free at (877) 567-7476.