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More home buyers are using reverse mortgages to purchase their next home. A new study finds that a quarter of 170 new home buyers surveyed wouldn’t have purchased a new home without using a reverse mortgage for financing.
“This is incredibly important insight, especially when you consider more and more baby boomers are moving into bigger homes rather than downsizing,” says Rob Cooper, national sales leader at Reverse Mortgage Funding LLC, which conducted the study. “Our study found there is a lot of room for improvement when it comes to recommending reverse mortgage for purchase financing because most people are not even aware of this option—or have not been well informed about it.”
The majority of borrowers who used a reverse mortgage to purchase a new home said they were able to buy a more expensive home or a property in a more desirable location because of it.
Reverse mortgages are for borrowers ages 60 or older. The home they are purchasing must be their primary residence. Buyers also must participate in mandatory loan counseling to use these loan types. There are risks to using a reverse mortgage, and borrowers will want to ensure they understand all the nuances and risks before taking one out.