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Can a reverse mortgage be used to buy a home?

Retiree hears rumors of no-monthly-payment situation
Published on Aug 10, 2006

DEAR BOB: I heard there is a way to buy a house or condo with a reverse mortgage and not have to make any monthly mortgage payments. Is this true? Is this a way for a senior citizen to buy a retirement home? --Mr. L.M. DEAR MR. L.M.: Yes, a "reverse mortgage for home purchase" is available from Fannie Mae. The two other major reverse mortgage lenders, FHA and Financial Freedom Plan, do not offer these special reverse mortgages. Purchase Bob Bruss reports online. A reverse mortgage for home purchase usually requires a large, cash down payment, typically around 50 percent of the purchase price. The balance is funded from a reverse mortgage. Such a reverse mortgage is ideal for the purchase of a retirement home where you obtain the down payment cash from the sale of your former residence. Of course, you must be at least 62 to qualify. Details are available on the Internet at www.reversemortgage.org. Look for Fannie Mae reverse mortgage originators in your state. DON'T RUSH TO SELL HOME I...

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