Reverse Mortgage Could Help You Downsize to One of “Best Places to Retire”

Each year Money magazine comes out with its list of the best places to retire. This year’s list includes Port Charlotte, Fla., Palm Springs, Calif., and Pinehurst, N.C. If you find yourself fantasizing about moving to one of the towns on the best places to retire list, perhaps a reverse mortgage can help make your dream a reality.

How an HECM Can Help

The Department of Housing and Urban Development’s Home Equity Conversion Mortgage (HECM) allows homeowners age 62 and up to convert their home equity into cash. You can then take that money and use it for the purchase of a new home, as long as it will be your principal residence. Using the proceeds to buy a home can allow you to:

• Downsize to a smaller home.
• Relocate to a region that’s more affordable.
• Purchase a home that accommodates your physical needs.

What Types of Homes Can You Buy?

You can use a reverse mortgage to purchase an existing one- to four-family residence. However, if you dream of running your own bed and breakfast, you’ll have to find another way to purchase it since you cannot use a reverse mortgage loan for that purpose. You also cannot use a reverse mortgage loan to buy a boarding house, co-op, or manufactured home built before June 15, 1976.

Working with a Reverse Mortgage Lender

Even if you will be the sole mortgagor on your home purchase, your mortgage lender will check your spouse’s credit report, too. That’s because underwriters want to see what kind of financial obligations, debt, judgements, liens, etc. might affect your ability to get a clear title to the home. Make sure you and your spouse are prompt with providing any necessary documentation when asked. Get free quotes from reputable reverse mortgage lenders here.

This entry was posted on Monday, October 5th, 2009 at 12:19 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.