As of January 1, 2009 there’s another new way to help seniors overcome the fear of running out of money. There is now a Reverse Mortgage Loan Product that can be used to purchase a home. A senior 62 years or older that owns their home outright (or has a very low balance that can be paid off) may use an FHA HECM (Home Equity Converstion Mortgage) to purchase a home and never have a monthly payment.
Imagine, a senior who owns a home worth $200,000 and wants to purchase a condominium for $250,000. After selling their home and paying closing costs, there would be as much as $186,000 left from the sale of their current home. Using an FHA HECM reverse mortgage, they would need $89,035 to purchase the new condominium.
The best part? No monthly mortgage payment unless they move, or die. As long as taxes, insurance and those association dues are kept current, you do not need to repay the loan. You don’t have to worry about outliving the loan.
More resources on FHA HECM Reverse Mortgages:
Call AARP toll free at (800) 209-8085
U.S. Department of Housing and Urban Development
Get an estimate of the amount of funds you’ll need to purchase your new home using an FHA HECM Reverse Mortgage
Find a HUD approved reverse mortgage lenders