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Could someone explain how this works? I am over 62, own my house and have a mortgage. I would like to live in another state, but cannot sell my house for the amount I need to buy another one.
Actually, I cannot sell my house at all. No one is buying here. If I rent out this house and keep paying on the mortgage with the rent money, could I move out and purchase another house in the new state with a HECM reverse mortgage for purchase? How much would I have to put down and would I then not have any house payments on that house? It sounds like a dream, but I don't want it to turn into a nightmare.
Whatever fraction you could get on a reverse mortgage, you can use as part of the purchase money. So if you qualified for a 55% payout, on a $200,000 home purchase you would have to put $90,000 cash into the deal. No payments! Closing costs and fees would be higher than for a conventional mortgage. Get a good lender and learn more about your specific situation.
We just purchased a $245K house using a reverse mortgage. DH is 64. The percentage you have to put down is based on age. We put down approximately 45%...In other words, we brought about $112K to the table. That included the closing costs. We will never have a house payment. We do have to cover taxes, insurance, and any repairs to the home.
I am not yet 62, so the house is in DH's name only. If he should pass before I turn 62, I have enough life insurance on him to pay it off, but I have a year to decide what I want to do, list the house for sale, pay it off, or just hand it to the bank and walk away owing nothing. If he passes after I turn 62, I can assume the mortgage (at least that's what they told me) and continue to live in the home. After I die, whoever I leave it to has the same options as above.
It's a wonderful feeling, knowing we don't have a house payment!
Yes, please keep your comments to yourself unless it has to do with my question.
So I would probably have to put all my savings into the new house, as a down payment, and then would have no house payments ever, is that right? And its based on age, not income? I don't want to go talk to my local mortgage co (B of A) cause I hate them. Two years ago I applied for a make home affordable modification and got nothing but the runaround. Is there a website that anyone knows about that explains reverse mortgage for purchase and gives you a calculator to work it out?
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