Reverse Mortgages 101
It may seem counter-intuitive for an agent to use reverse mortgages to move more real estate. After all, these loans are designed to help seniors to stay in their homes. In many instances, however, agents can actually elevate sales by helping buyers leverage a reverse mortgage.
Exploring Reverse Mortgage Options
A traditional reverse mortgage can be a godsend for seniors who are struggling to pay for food, medications and other necessities. By unlocking equity in their properties, these homeowners are able to stay in their homes for the long hall and free up emergency cash. At the same time, by tapping the equity in their homes, buyers can also take advantage of new real estate opportunities. Some examples include:
- HECM for Purchase: This type of loan is designed to help seniors secure their next home. This is accomplished by combining a reverse mortgage with proceeds from the sale of a previous residence, all in a single transaction. Real estate professionals can help seniors leverage this unique mortgage tool to purchase homes they might normally view as outside their budgets.
- Down Payment Source: When family or friends need money for a property down payment, a homeowner can use a reverse mortgage to secure the cash. Today’s higher down payment requirements often prevent an agent’s clients from qualifying for the homes they want. This is especially common with young, first-time buyers with parents or grandparents that might have accessible equity in their own homes.
- Investment Capital: Using reverse mortgages, seniors can unlock investment capital to take advantage of timely real estate investment opportunities in a down market.
Real estate professionals face an aging Baby Boomer population that will look toward property sales as a way to unlock their housing wealth. To take advantage of these opportunities, agents need to educate their clients about all financing options, including reverse mortgage loans. They should also explain that these loans can come with unique requirements whenever a homeowner, their children or estate, places a home with a reverse mortgage for sale. By familiarizing themselves with the ins-and-outs of the reverse mortgage process, smart agents can position themselves to secure more clients and sell more real estate.
Learn more about how a Home Warranty can save homeowners from unpleasant financial surprises and add value to your business.