Selling your home and purchasing the next one as a senior comes with some meaningful advantages. With the right strategy, you can reduce expenses, simplify your lifestyle, and even access your equity more effectively.

Let’s walk through what this can look like.

Key Benefits to Know
As a senior homeowner, there are a few important advantages:
• Property tax reduction: If your income falls below a certain threshold, you may qualify for a reduced property tax rate—helping lower your ongoing housing costs.
• Access to equity: Options like a reverse mortgage can allow you to purchase your next home while preserving cash and eliminating monthly mortgage payments.

Scenario 1: Selling and Buying Mortgage-Free

Let’s say you own a home valued at $1.2 million with a remaining mortgage of $500,000. Your current interest rate is low (4.5%), but your goal is to reduce monthly expenses—or eliminate them entirely.

You decide to sell and downsize.
• Sale price: $1.2M
• Mortgage payoff: $500,000
• Estimated net after closing costs: $600,000

You find the perfect smaller home or condo for $600,000.
After accounting for approximately $6,000 in closing costs on the purchase, you are essentially mortgage-free, dramatically reducing your monthly financial obligations.

But What If You Want to Keep Some Cash?
This is a common question—and where another strategy can come into play.

Scenario 2: Reverse Mortgage Purchase

If you prefer not to tie up all your equity in your next home, a reverse mortgage purchase may be an option.

What is a reverse purchase?

It allows you to buy a home using a special type of loan where you do not make monthly mortgage payments. The loan is repaid later when the home is sold.

 In this scenario:
 • Purchase price: $600,000
 • Down payment (approx. 50%): $300,000
 • Remaining loan balance: $300,000

You keep a portion of your proceeds in cash, and no monthly mortgage payments are required.

There are costs associated with this type of loan. For illustration purposes, we’ll estimate about $80,000 in fees (this can vary, and a lender would provide exact figures).

 

What Happens When You Sell Later or perhaps. Once you pass your heirs will need to sell.

Let’s say you sell the home/ or your heirs sell the home in 5 years for $750,000.

 At that time:
• Loan balance (including accrued interest): approx. $180,000
• Estimated fees: $49,000

After repayment, you or your heirs would keep roughly $432,000.

Final Thoughts

While a reverse purchase is more complex, it can be a powerful tool for the right situation—especially if your goal is to eliminate monthly payments while maintaining access to cash.

Every scenario is unique, and these numbers are for illustration purposes only. I always recommend connecting with a trusted lender who specializes in these products to walk through the details.

If you’re considering a move, I’m here to help you explore your options and create a plan that supports your lifestyle and financial goals every step of the way.

Consistent Performance in a changing market.
How Can I Help?
GABRIELLE RITTER
Charter Real Estate
 206-866-8136

 Gabrielle@charterrealestate.com
www.gabrielleritter.com