Reverse Mortgage for Home Purchase

Most people assume that a reverse mortgage can only be used for getting money out of a home they already own. But a specialized Reverse Mortgage from Fannie Mae allows seniors to purchase a new home. This is great for seniors looking to sell their current large home and move into a smaller home with no monthly mortgage payments.

The Fannie Mae reverse mortgage home purchase program does require the purchaser to put pay a small downpayment and then the proceeds from the reverse mortgage covers the remainder of the purchase price. Here are some of the benefits to using a reverse mortgage to purchase a new home:

1. No borrower income limits and no credit requirements. The loan is based on your age and the value of the home being purchased.


2. You can lower your down payment and keep more of your cash by choosing to use all or part of the loan proceeds toward your home purchase.


3. No monthly payments for as long as your life in the new home.


4. Loan proceeds do not affect Social Security or Medicare benefits. (If you receive Supplemental Security Income or Medicaid, these benefits may be affected.)


5. You do not pay back the loan until you sell your home, no longer use it for your primary residence, or pass away.


6. You will never owe more than the value of the home at the time of repayment, even if the loan balance exceeds the value of your property. This means no debt will ever be passed along to your estate or your heirs.

Source: www.fanniemae.com

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