using a reverse loan to buy a house
In the next section of the article an example is given how downsizing actually frees up income for other uses by living in a smaller home and reducing the overall housing expenses.
It also mentions the various payments options, at which any time the borrower can change as they wish. There are not prepayment penalties on a Reverse loan, so if for any reason the borrower wishes to put money back into the loan, they can and it will increase their line of credit.
Here is the next section of the article that summarizes the discussion in regards to the Boston College ebook. I will share the last part in a follow up post.
Boston College eBook Touts Retirement Benefits of Getting a Reverse Mortgage
Posted By Jason Oliva On September 16, 2014 @ 6:02 pm In HECM,News,Retirement,Reverse Mortgage
“For example, downsizing from a $250,000 house to a $150,000 property can increase a person’s yearly income by $3,000 after calculating the difference in prices, moving and selling costs and how they affect yearly income. Additionally, this downsizing scenario can also free up $3,250 in yearly income when factoring the new housing expenses (taxes, insurance, upkeep and utility bills) associated with the less expensive home.
But for those who don’t want to task themselves with relocating, that’s where a reverse mortgage can be beneficial, the ebook notes, detailing several key requirements to be eligible for the loan along with critical Home Equity Conversion Mortgage (HECM) guidelines.”