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#124 Using a reverse mortgage to launch a new start in life



Widowed eight years ago, you’d planned to age in place – the old place, that is, – your long-time family home. Nothing wrong with that home, which is fully paid for and which you had remodeled just five years ago to accommodate your needs.

 Recently, however, your life has taken an abrupt turn for the better, as a treasured companion has accepted your marriage proposal. Your fiancée is still in a very nice apartment, but rather than having her move in to your existing home (filled with memories of the past) you have decided to purchase a new home, using the proceeds from selling this one.

Based on recent home sales in your neighborhood, you are confident that the value of yours has appreciated, perhaps even enough to make an all-cash purchase of the new residence. The plan is for you to be sole owner of the home, while she covers the ongoing utilities and maintenance costs.

One strategy to consider would be purchasing your new home using a reverse mortgage (HECM for Purchase). That might allow you to keep some of the proceeds from the sale of your existing home, even if the new one is of greater value. Reverse mortgage financing is “silent”, with no mandatory monthly mortgage payments required.

An additional thought is that, if the two of you are married by the time you apply for the reverse mortgage, there could be built-in security for her, in that, should she survive you, she would have the right to remain in the home for the rest of her life.

Your own housing wealth, used as a planning tool, might make your ” turn for the better ” even better.