GMAC Real Estate What a Reverse Mortgage can do for You
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What a Reverse Mortgage can do for You

Takeaways

  • Reverse mortgages don’t require a monthly payment.
  • They also protect your property from foreclosure.
  • The property must be clear of all liens and other claims to be eligible for a reverse loan.

Did you know?

  • The money received from a reverse loan can be used to buy a second home.
Reverse loans put money in your pocket. If you are a senior looking to purchase a retirement second home and are looking for ways to fund the sale, a reverse mortgage on your primary residence might be a good choice. This financial instrument is targeted to homeowners 62 years and older. When reverse mortgages were created in 1989 they were viewed as a method cash-strapped seniors could use to keep their home and have money to live on. This perception has evolved to where homeowners are using reverse mortgages for a number of uses, including buying second homes.

A reverse mortgage does not require any monthly payments, and you or your estate will never owe more than the value of your home to repay the loan. This loan also protects your primary residence from foreclosure.

Buying a Retirement Home

Let's say you take a reverse mortgage on your primary residence and use that money to purchase a second home with the intention of eventually retiring there. You remain in your primary residence for as long as you like and make no monthly payments. Once you decide to retire and move into the retirement second home, you sell your primary residence and pay off the reverse mortgage. Remember, the maximum you pay is the value of your home. If the value of the loan is less than your selling price, you pocket the difference.

The end result is you've acquired a retirement second home and lived in your primary residence in the meantime with no mortgage bills to pay. If you’ve worked the numbers correctly you will even likely walk away from the sale of your primary home, and the repayment of the reverse mortgage, with extra money.

Search for Second Homes for Sale

To search for a selection of second homes for sale, please visit lifestylehomesearch.com, or visit the website of a GMAC Real Estate Office that serves the area where you'd like to buy a second home. To learn more about buying Second Homes or Vacation Homes, explore the rest of this section, or contact a GMAC Real Estate Agent.