Column Makes Case for Reverse Mortgage Second Home Purchase

Outlining a reverse mortgage scenario in which a couple uses a reverse mortgage in order to buy a second home, columnist Tom Kelly shows the merits of using a reverse mortgage to purchase a new retirement home, rather than the traditional “age in place” use of the loan. 

“While the proceeds of a reverse mortgage typically help seniors to “age in place” by making their home more comfortable for their retirement years, there are no limitations on how reverse funds can be used,” Kelly writes in a Spokesman-Review column this week. 

Kelly details a scenario in which a couple owns a home, then gets a reverse mortgage to reduce monthly expenses and free up cash to purchase a second home. 


He highlights the benefits of the loan, including the borrower’s ability to “outlive” the home without being forced to move. 

“The homeowner cannot be displaced and forced to sell the home to pay off the mortgage, even if the principal balance grows to exceed the value of the property. If the value of the house exceeds what is owed at the time of homeowner’s death, the rest goes to the estate,” he writes. 

Further, there are new non-borrowing spouse protections in place that aim to prevent a borrower from losing his or her home if the name is not on the home title and the borrowing spouse passes away. 

View the Spokesman-Review column

Written by Elizabeth Ecker

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  • Tom Kelly’s a little late to the party….where was he 19 years ago when I did my first one of these? His epiphany comes a little late now that the new Hecm Lite has arrived.

    • hecmvet,

      Mr. Kelly may not be the first one to present the concept but is it a bad reminder to the senior community that HECM proceeds can be used for other things than just aging in place or paying off mortgages?

      What those who regularly communicate with Mr. Kelly should encourage him to do is to write a few articles on how HECMs can be utilized as early as 62 (while they still may be working) to increase and extend cash flow much further into retirement as part of an overall prudent retirement plan. We need to expand the message that HECMs can be used far more effectively than just as a loan of last resort.

      Of course a strong article on HECMs for purchase would be a good idea too.

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