Reverse mortgage can help seniors buy new home

•  Reverse mortgages are mostly viewed as a way to allow seniors to stay in the homes they love but can no longer afford. That monthly reverse-mortgage check can make all the difference when it comes to covering costs. But a reverse mortgage can also help seniors buy a new home.

•  These days, many seniors are having trouble selling their current home and downsizing to a smaller home. And others, just entering retirement, are having difficulty financing the purchase of a new home, since they no longer have an income and don't want to put all of their savings into the purchase.

Here's where a reverse mortgage can help both buyers and sellers.

•  Just go to www.Reverse Mortgage.org and use the calculator there to see the dollar amount of reverse mortgage you would qualify for, based on your age.

•  For example, a 65-year-old could likely get about $240,000 on a reverse mortgage on a $500,000 home. That means a senior who wants to buy your existing $500,000 house needs to come up with only $260,000.

•  The reverse mortgage would provide roughly $240,000 of the purchase price, with no monthly payments required. Now your old, larger home becomes more salable to someone with cash from the sale of an existing home.

•  And once your home is sold, you can take part of the $500,000 sale proceeds, and use it -- along with some of your cash and your own reverse mortgage -- to buy your next, smaller retirement home. So, if you're age 75, and want to purchase a $350,000 condo, you could likely get a $230,000 reverse mortgage on that smaller condo. That means you'll have to put down only $120,000 in cash on your new condo, and you can put the remaining $380,000 from your home sale in the bank (or several banks).

Using a reverse mortgage to buy a home opens an entirely new dimension to this fascinating product.