I'd never heard of one either until a friend explained it to me. They get pre-approved for a certain amount house. Then when they find a house they want to buy, the purchase is contingent on the sale of their own home. My friend has a 3-month contingency period to sell his house. Once their house is sold, they put 60 percent down on the new house. They will never make a house payment and will owe only homeowner's insurance and taxes for the rest of their lives. Interest will accrue on the remaining 40 percent. When they die their heirs will have an opportunity to pay the. 40 percent and interest, or the bank or whoever can resell it if no one pays off the RM. Our friends have no kids, to leave anything to so their will be inheritance issues. They feel it will work great for them.
It's called a reverse mortgage purchase. BTW, the house they have put the offer on is brand-spankin new. |
