A spouse passes away leaving behind a widow. The remaining partner wants to move closer to family. But there’s a catch – although the widow’s current home is owned outright, they would typically need to sell it before they could purchase another. And they wish to move to an area where the median home price is much higher than the home available to sell.
Reverse mortgage for purchase may be an excellent option for this widow. Let’s look at the scenario in detail:
Predicament #1: Widow needs to sell current home before purchasing a new home.
Solution: With a reverse mortgage for purchase, this widow would not need to sell the home immediately. Any personal funds or assets used to purchase the new home could be replenished when the current home sells – and the funds from a reverse mortgage would supplement the initial funds needed. This would allow her to move and get settled immediately.
Predicament #2: The cost of a home in the area the widow is moving is much higher than where she currently lives, meaning the proceeds from her current home sale will not cover the entire purchase.
Solution: When utilizing a reverse mortgage for purchase, her out of pocket cost would be substantially supplemented. For example if she anticipates selling her current home for $200,000 and purchasing a home for $300,000, the reverse mortgage may cover the $100,000 difference allowing her to live mortgage payment free and best of all – near her family.
Reverse Mortgage for Purchase (aka: HECM for Purchase) is an FHA insured program for seniors 62 and over. Although borrowers will not have a mortgage payment, they are still responsible for property taxes, homeowners insurance, HOA fees, and other general household expenses such as utilities and upkeep.
Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.