flash financial

Is It Possible to Use A Reverse Mortgage To Purchase A New Home?

One of the standard categories to use the reverse mortgages is for the debt coordination for housing, which was started in 2009 as the way for using the reverse mortgage to buy a new home. The government realized that many people are using the costly and complicated 2-step process for getting the traditional mortgage for buying a new home and then using the reverse mortgage to pay off that particular mortgage.

For example, take an example of the 62 years old house, which has a 5% expected rate and the principal limit factor is 53%, and the HECM for Purchase can cover the portion of the home cost. The rest, 47%, can be financed from the other assets like selling the previous primary residence.

The rest of the payment cannot be made by the use of the other type of debt. To keep the initial mortgage insurance lower, the borrower can only tap 60% of the principal limit, around 32% of the home’s overall value. Such resources can be paid back after one year has passed.

After that point, the new home is owned with the help of the debt that does not need to repay until the borrower leaves home. Therefore, coordinating the use of the debt of the housing and not having the monthly mortgage payment will reduce the household fixed cost and provide the potential relief for the need to spend the down payments as a whole.

The HECM for the Purchase Program can be used for the downsizing or upsizing of the retirement home. For the downsizing people, the HECM or the Purchase can be free up more for the assets. For those who are upsizing and have financial resources to manage, the HECM for Purchase can allow for the more expensive home. Buying with a reverse mortgage can be better than buying a home with any other traditional mortgage facility.

Consult the team from Flash Financial, who will help you buy the home with the help of one of the standard categories to use the reverse mortgages is for the debt coordination for housing, which was started in 2009 as the way for using the reverse mortgage to buy a new home. The government realized that so many people are using the costly and complicated 2 step process for getting the traditional mortgage for buying a new home and then using the reverse mortgage to pay off that particular mortgage.

Call us today!

Leave a comment

Your email address will not be published. Required fields are marked *