Senior Arizona home buyers stretching their retirement dollars using a reverse mortgage lenders in Arizona. 

Arizona has always been an often thought of “best state for retirement.” But a boom in the economy has meant even more folks than ever are choosing the Copper State to buy their final retirement home. Reverse mortgage lenders in Arizona give relocating and downsizing home buyers many options in terms of natural environment, amenities, and lifestyle. Phoenix, Lake Havasu, Flagstaff, Tucson, and Bullhead City/Kingman all have a different feel for the community, amenities, and lifestyle. They all share some common traits: relatively low tax burden, lower to average cost of housing, and senior community.

Lake Havasu, AZ

Let’s look at Lake Havasu City, for example. According to the Arizona Republic, Lake Havasu scored around the national average in a composite cost of living with categories such as housing, transportation, utilities, and medical care. It came in at 101.6 (with the national average being 100). However, compare that to just across the river in California (from which many retirees are relocating) and it’s a great bargain. According to Jennifer Mrazek, Designated Broker for Mrazek and Associates, “Many Californians are relocating to Lake Havasu City to escape high real estate prices and taxes. More importantly, the laid-back aspect of “Lake Life’ is drawing more and more to admirers, to Lake Havasu City. Whether it is dining on the water or enjoying the many water recreational activities, Lake Havasu has much to offer. This tags this beautiful city as the Arizona desert ‘go-to’ place to be.”

Bullhead City & Kingman, AZ

Meanwhile, just up the river in Bullhead City and Kingman, the Arizona Republic reports this is where seniors will find the lowest cost of living. In fact, the City of Bullhead City, AZ has set up a webpage to calculate the cost of living in your home area and compare that to relocating to Bullhead City and Mohave County. If you are interested in calculating the cost of living or just gathering more information, click here. However, according to one Bullhead City retiree I recently interviewed, the biggest concern is proximity to quality healthcare. If one has a major medical procedure, assume it will be conducted 1 1/2 hours north in Las Vegas or 4 hours south in Phoenix.

Tucson, AZ

Tucson, AZ in 2020 ranked as the highest Arizona city for retirees on BestPlaces.net. Here is what they had to say about Tucson: “The economy is mainly supported by the university, retirees, and high tech industry. Several large companies including IBM, Raytheon, Intuit, and Texas Instruments have facilities in this area. Some of these businesses have proven to be cyclical in the past but are doing reasonably well now. The cost of living has been rising and is now above the U.S. average, and home prices have escalated rapidly.

The climate is close to ideal. The high altitude moderates the desert heat while the southerly location and dry surroundings moderate winter influences and create a generally pleasant atmosphere. The arts and culture scene is strong for its city size.”

Why Move to Arizona?

So how can homeowners looking to move from California and other areas really leverage the equity they have released when they sell their traditional family home?

Recently, I have closed several Arizona purchase transactions with retirees using the government’s Home Equity Conversion Mortgage (or reverse mortgage as it is commonly called). Can I buy a home using a reverse mortgage? The answer is a resounding YES.

What is the Benefit to Purchasing a Home with a HECM or Reverse Mortgage Loan?

Well, let’s look at the mechanics. Suppose a couple sells their home in California and receives a net check of $500,000 from the proceeds of the sale. This is a nice amount since it also represents the number of tax-free capital gains that a couple can realize from the sale of a primary residence without creating a tax burden. Now they find a nice property in Lake Havasu for $350,000. Their initial plan is to pay cash $350,000 for the house and put the other $150,000 into an investment account to be supervised by their financial advisor. Their advisor tells them that they can create a small to modest retirement cash-flow from these funds, but at least they won’t have a mortgage payment.

A great alternative to create more retirement cash-flow would be to use an H4P or HECM for the purchase loans. In this same scenario, the homebuyers would put 50% down ($175,000) and the rest would be covered by a reverse mortgage for seniors. Now, the payments on the reverse mortgage are optional. Financially, on a monthly basis, they can live there the same as if they purchased cash for the home. The balance can be paid off down the road when they are no longer living in the house. If they both pass away, the house will be sold by their heirs, the balance of the reverse mortgage paid off, and the estate would retain the rest.

But the big thing is that instead of having $150,000 to invest for the remainder of their retirement, their advisor that specializes in reverse mortgages for seniors now has $325,000 to work with! They can create a much bigger and more robust retirement income of $325,000 than they can with $150,000. And again, they have no required mortgage payment. As the homeowners, they would just need to pay their taxes, insurance, and any HOA dues as they normally would do with any other property purchase.

Think about what having $100s of thousands in extra retirement funds would do for you!

Connect with Chris Handy, CRMP®

Geneva Financial’s Corporate office is located in Chandler, Arizona. Geneva Financial has had reverse mortgage lenders in Arizona since 2009. The office is located at 3155 S Price Rd, Suite 105, Chandler, AZ 85248.

For more details on purchasing a home with a reverse mortgage loan, Chris Handy can be reached via phone or text at (775) 777-5669.

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