Buying A Florida Home With A Reverse Mortgage
Articles - Retirement
Seniors around the nation have new financing options for purchasing a home. By using a reverse mortgage to purchase a home, older borrowers can use existing cash savings or the money from the sale of their home to purchase a new home in Florida and around the country. The remaining purchase price of the home can be borrowed by taking out a reverse mortgage. This incredible loan eliminates future monthly mortgage payments.
by TimBegert


Seniors around the nation have new financing options for purchasing a home. By using a reverse mortgage to purchase a home, older borrowers can use existing cash savings or the money from the sale of their home to purchase a new home in Florida and around the country. The remaining purchase price of the home can be borrowed by taking out a reverse mortgage. This incredible loan eliminates future monthly mortgage payments.

The Florida HECM for Purchase makes it easy for borrowers to purchase a home with a reverse mortgage. Borrowers can use the proceeds to move to a new location or to downsize their primary residence to meet their retirement needs. Seniors could also conceivably sell their existing home and use the proceeds to buy a larger home financed with the reverse mortgage. The amazingly flexible product makes almost anything possible.

Purchasing a new home with a reverse mortgage is very similar to purchasing a new home using conventional financing. However, the loan process tends to be shorter and more simplified. Generally the amount of money a borrower is eligible to take out is based upon the home's value, the age of the youngest borrower and the current interest rates. When determining the home's value, the bank will generally use the lower of the appraised value, the FHA limits or the purchase price. The amount of money the borrower would need to provide at closing is the difference between the loan's value and the amount of money the borrower is eligible to borrow, minus any closing costs. The appraisal, inspection and closing processes are almost exactly the same as in conventional financing.


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In order for a home to be eligible for a HECM for Purchase reverse mortgage, the property only needs to meet standard FHA eligibility requirements. Single-family homes, multi-unit properties and certain condominiums are eligible. If the purchase property is new construction, the property must be completed by closing and ready for immediate occupancy. Once the loan closes, the borrower must occupy the property within 60 days of closing.

It couldn't be easier to take out a reverse mortgage. There's no requirement that the borrower maintain any sort of income and the borrowers can even have bad credit. These loans are totally non-recourse, so the bank will only look to the property value to pay back the reverse mortgage. Simply put, this means you can never owe more than your home is worth.

Reverse mortgages will definitely grow in number over the coming decades. As more seniors reach retirement age and look to move into their retirement homes, expect to see more and more homes purchased with these loans. Financing a new home with a reverse mortgage and eliminating all monthly mortgage payments is certainly an attractive alternative for many on a limited income.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

If you're thinking of financing your home with a reverse mortage, check out Reverse123's site on Reverse Mortgage Information and Florida Reverse Mortgage Lender