Andrew Scammon from Alpine Mortgage joins me today to help explain how you can use a reverse mortgage to purchase a home.
Today I’m joined by Andrew Scammon from Alpine Mortgage to talk about how you can use a reverse mortgage to purchase a home.
We work with more and more folks nowadays who are either retired or about to retire and would like to buy a new home but are unsure they can qualify for a conventional loan. This is typically because they either live on a fixed income or are about to live on a fixed income.
If you’re planning to downsize as part of your retirement plan, a reverse mortgage could be a useful tool for you because when you compare a reverse mortgage to a cash purchase, it effectively doubles your money.
This comes in handy for anyone wanting to sell off their existing home and downsize but knows they won’t realize enough benefit from that sale to make a cash purchase for their next home. If you net $200,000 from your home sale, that’s not going to buy much house. A reverse mortgage can double that sum and allow you to purchase a $400,000 house.
Of course, there are some cautions you need to take. You need to work with a seasoned Realtor who knows their way around the market. If you’re looking for a condominium, it would have to be an FHA-approved condominium. For many people, though, it’s become relatively commonplace to identify properties they love without having to worry about making a mortgage payment or qualifying for one because of reverse mortgages.
With reverse mortgages, payments are allowed but not required. You can purchase a $400,000 house by putting down $200,000 and getting a $200,000 reverse mortgage. When the house goes to your estate or heirs, they have time to prepare the property, market it effectively, and realize the best gains on it that they can. The reverse mortgage balance is then paid off and the heirs divide up the remaining equity. The only age requirement for using a reverse mortgage is at least one of the borrowers must be 62 years old.
I want to thank Andrew for joining me today. If you know anyone who is looking to use a reverse mortgage to purchase a home, you can call him at 562-743-0111 or visit his website at effectiveretirement.com.
If you or anyone you know are looking to buy, sell, or downsize, feel free to reach out to me. I’d be happy to help.