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Senior Solutions Through Financing

Quite possibly, the segment of the population most damaged by the economic downturn may be Seniors. They have taken the double-whammy of depreciation in their real estate and a slashing of their retirement funds.

The Challenge

Many Seniors have had to alter their retirement plans because of this.  Some have had to stay in the workforce longer than they had hoped.  Many have had to tighten their belts.  Others have put off the sale of their home, in a desperate hope that the market would rally and save them.  Alas, that has not happened (and isn’t likely to happen for years).

So, we face a situation where many Seniors would like to move from their home for a variety of reasons (the carrying costs and real estate taxes, the upkeep is too burdensome, the desire to move to warmer climates or closer to family,  or maybe just because navigating the stairs is difficult).  At the same time, the Senior is concerned about out living their funds or having to take out a mortgage to purchase their home when they have a limited or fixed income.

The Solution

There is a relatively new, little known mortgage program that can help.  It’s a Purchase Reverse Mortgage.

Most are aware of the traditional Reverse Mortgage which allows a Senior, age 62 and over, to stay in their home without having a mortgage payment.  The money they borrow plus the interest that accrues are a lien that needs to be satisfied upon death of the longest living borrower or permanent moving out of the home or sale of the property.  The amount of money available to the Senior is based on their age and the value of their home.  Because there are no payments, lenders don’t even look at the borrowers income, assets or credit (you could even be in foreclosure and get a Reverse Mortgage).

Now onto the Purchase Reverse Program.   Under this program, without verifying income, without caring about a credit score, without concern for a borrower’s assets (beyond what monies they need to purchase their home), a lender can close a loan for a Senior.  Again, depending on the age of the Senior and the Purchase Price of the home, we will lend in the neighborhood of 50% of the purchase price, and the Senior will have NO MORTGAGE PAYMENT.  True, when they pass away or move out of the home permanently or sell the home, they will have to pay back the money plus interest, but now Seniors can get out of a property that no longer suits their needs and move on to the next stage of their lives WITHOUT needing to liquidate their retirement accounts and be victimized by the equity they have lost in their current home.

Seniors, I urge you to explore this opportunity.  Despite the challenges you face from the decline in your home’s value and the shrinkage of your 401K, make your golden years everything you hoped by giving you liquidity options and a home with no monthly mortgage payment.

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