RETIRING INTO HOME OWNERSHIP
Over your forty-plus year career on the road as a corporate trainer and coach, it has never made sense for you to invest in a permanent residence. Now, having officially retired two years ago at age 68, you’ve decided to become an “advanced age first time home buyer” (good fodder for a comedian’s routine, you’re afraid), and, while still accepting limited, local, speaking engagements, you’re ready to “reside in place” (you are not yet ready to apply the word “aging” to your own person!).
As a single with no children, you have been able to accumulate sufficient assets to make a cash purchase of a condo, without disrupting the ongoing support of your active lifestyle and social life. So far, you’ve put off making any withdrawals from your IRA rollover accounts. There is an inheritance coming within the next few years, but you don’t want to wait for that in your purchase.
While it appears you will need to take a sizeable – and taxable – distribution out of your rollover account(s) in order to purchase the condo, you might also consider expanding the price range you can afford, by partially funding the purchase through a HECM (Home Equity Conversion Mortgage). As a 70 year old, the reverse mortgage could provide as much as 40% of the new home value, The pre-qualification process for the HECM will ensure that any purchase offer you make will be treated seriously by the seller, but, even more important, so long as the condo remains your primary residence, there will never be a requirement to make monthly mortgage payments.*
If and when you receive that inheritance you may opt to put that money towards repaying the reverse mortgage loan. If you do choose to make payments, the “restored” (unused) portion of your home equity will grow in a liquid, non-taxable line of credit at the same rate as that being charged on borrowed funds.
In a way, you’d be approaching the “residing in place” process in reverse.
https://mutualreverse.com/david-garrison
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org
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