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Introduction of New Purchase Reverse Mortgage Loans Program
Provides Seniors with More Options

Traditional mortgage loans require that the beneficiary remains in his/her home to benefit. The senior gets access to steady income by reversing their home equity. This has been the conventional structure of reverse mortgage loans and it has suited many a senior. However, this structure does not favor the senior who would not want to remain in his/her old home.  

While many seniors quickly opt for reverse mortgage loans as they would not want to consider moving, others may want to move for various reasons. The old home may hold bad memories, may now be too big to fit their needs or they may want to move closer to relatives and friends. The new purchase reverse mortgage loan program is designed to cater for this group of seniors. 

Seniors, who own a home, are up to 62 and who wish to move from their present home can benefit from the new scheme. With the new scheme, they just have to apply for a purchase reverse mortgage loan. They will give up their old home and then look for a new one. The value of the old home is calculated based on its actual market value as against the usual lesser quick sale value (the value of the home if it is to be sold quickly to upset a debt).  

Based on the value of the old home in relation to the new home an initial deposit is taken from the sale proceeds of the old home and used to make a down payment for the new home. The balance is available for the senior to do as he or she may please. An advantage of this new program is that seniors will not have to make monthly payments for their new home as the lender remains unpaid as long as the senior is alive and residing in the home. This new program increases the reverse mortgage options open to a senior.

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