~ Chad Moore
Mortgage Loan Originator, #165458
(302) 236-9397 - Chad@TheMortgageMarketofDelaware.com

 Purchasing a downsized home with a Reverse Mortgage also allows seniors to retain significantly more money to fund their retirement than buying one outright with cash. While paying cash for a home may eliminate a mortgage payment, those funds are then tied up in the property instead of being readily available and not subject to constantly changing market conditions. For example, say a homeowner nets $325,000 from the sale of their property, and they find a new downsized home that’s listed for $300,000. They could walk in and pay full price in cash, but they’d only be left with $25,000 in the bank for the remainder of their later years. By 

 After securing historically low mortgage rates just a few years ago, many homeowners are now feeling like they’re stuck in their homes. They don’t want to give up that low rate and take their chances in today’s housing landscape where property values and interest rates are elevated, even if their current home no longer suits their evolving needs and physical requirements. However, homeowners aged 62 and older can leverage their own newfound increased equity into retirement funds by selling their home in this competitive market and using the proceeds to purchase a new home with a Reverse Mortgage.

using a Reverse Mortgage and a large down payment instead, the built-in equity becomes an instant retirement fund with a substantially higher available balance.

The Mortgage Market of Delaware, LLC

 Of course, there are a few common misconceptions and myths about Reverse Mortgages. It is often believed these loans are designed to take advantage of senior homeowners and rob them of their homes. While some individual lenders and loan originators may operate in such unscrupulous ways, the Home Equity Conversion Mortgage program is regulated by the Federal Housing Authority and is structured with the express purpose of allowing seniors to age in place in their own homes while maintaining financial independence. In fact, homeowner education and counseling are part of the process, as the FHA and lenders want to ensure that those who obtain a Reverse Mortgage are fully aware of their rights, obligations, and benefits.

 A Reverse Mortgage’s balance will never exceed the value of the home, the line of credit grows over time regardless of the property’s market value, the mortgage is a non-recourse loan meaning the home is the sole collateral, the monthly stipend isn’t considered income so it won’t interfere with Social Security income restrictions, and homeowners always retain the title to the property. 

 Homeowners considering a Reverse Mortgage should contact a mortgage loan originator to discuss the benefits, the process, and the details of the program. The loan originator can start by researching the value of the property and calculating how much equity can be accessed. Next, the homeowner can weigh their options and decide how to best disperse and utilize the funds. The proceeds can be taken out as a one-time lump sum, or set aside as a source of monthly income, a line of credit, or combination thereof.

 Reverse Mortgages provide freedom and flexibility for senior homeowners who need to take control of their finances. Whether they want to stay in their current home and turn their equity into income, or move into a new home that compliments their retired lifestyle while providing financial security, seniors who have questions and want to explore their options should contact a loan originator and invite their family members to join the discussion about how a Reverse Mortgage could work for them.

Downsizing With a Reverse Mortgage

 Senior homeowners may have a variety of noteworthy reasons to downsize. Perhaps their current home is too large to maintain, keeping up with the yardwork is becoming too much of a burden, or they’re no longer comfortable climbing the stairs. Aside from the physical environment of the home itself, motivations to relocate may be financial or familial as well. A Reverse Mortgage can free up room in the budget, create an ongoing stream of consistent income, establish a reserve fund for the unexpected, and facilitate a move closer to family. All these personal goals can be accomplished in one loan that’s easier to qualify for than a traditional mortgage.