The Best Holiday Gift: A New Home Financed by a Mortgage with No Payment!
Settling into a new home for the holidays and your retirement years, especially when facilitated by a reverse mortgage, can offer a unique blend of financial security and comfort. The absence of a monthly mortgage payment allows you to enjoy your retirement and the holiday season with more financial peace of mind.
A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM) allows borrowers aged 62+ to finance the purchase of a home with a payment free loan. With this product you live in your new home paying only the expenses on the property (taxes, insurance and HOA). The principal balance of the loan grows over time, but so does the value of the home! This product allows you to age in place while maintaining independence and still leave a legacy for your heirs. When the loan becomes due, your heirs have the option to repay the loan and keep the home or sell the property and retain the equity.
The down payment required on an Federal Housing Administration (FHA) HECM is determined by the age of the borrower to ensure that borrowers will retain equity as they age into their home. This FHA insured program has a non-recourse feature, meaning a reverse mortgage client will never owe more than the house is worth.
Borrowers utilizing a reverse mortgage can dramatically increase their purchasing power while also retaining liquidity. Invested assets and retirement accounts do not need to be liquidated (often creating a taxable event) to acquire a property or afford a monthly mortgage payment. Additional monthly cash flow while also being able to purchase your dream home means a higher quality of life!
Your home can be the ideal gathering place for family and friends during the holidays. The absence of monthly mortgage payments means you can focus on hosting guests and creating lasting memories without worrying about a hefty mortgage bill.
Credits: Lauren Nygren, Senior Loan Officer, Cherry Creek Mortgage