Ever since the pandemic, the two of you have been wrestling with the decision of moving to the Washington, D.C. suburb where your daughter and grandchildren make their home. Basically retired (you each take on part-time speaking gigs from time to time to supplement the budget), you are concerned about the big increase in cost of living which the move would be certain to mean. You are not interested in either paying rent nor in taking on a mortgage payment after so many years, but you are more than willing to drastically downsize in terms of home size.
An important aspect in the discussions you’ve had with your daughter is the fact that she is in the healthcare field. In your mid-seventies, you have each enjoyed good health. Still, there is some concern about ailments that are part of the family history on both sides, and there would be comfort in being in close reach of your daughter.
One important option to explore is the HECM for Purchase reverse mortgage program, in which you would deploy the “housing wealth” in your Indiana home to finance approximately half your new home purchase out East. In a single transaction, (with only one set of closing costs) you would complete the mortgage and the new home purchase.
Referring to your reluctance to take on either a rent or a mortgage payment, with a reverse mortgage you would not be required to make monthly payments at all. (You would still be responsible for paying property taxes, homeowners’ insurance, maintenance costs, and any homeowners association fees that might apply to the new residence.
In fact, the reverse mortgage loan balance won’t become due until and unless the home is sold, vacated for more than a year, or when the last remaining borrower passes away. (Upon the second of your deaths, your daughter would have the option to either keep the home and pay off the loan or sell it and keep any proceeds remaining.
While the costs of health care, good, taxes, recreation, and general expenses will undoubtedly prove greater near D.C. than those in the Midwest, using your housing wealth to help with the housing piece of the equation might ease the pain of moving into those “higher price altitudes”!l
If you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).