Proposition 5: Easier for Seniors to Buy New Homes

There is one proposition on this years ballot that could have a huge impact on how aging baby boomers could buy a new home.

Nortex Reality Owner and Real Estate Broker Michael Detrick said Proposition 5 will allow 62-year-old and older homer owners to purchase a new home while simultaneously obtaining a reverse mortgage under one transaction.

If passed, Proposition 5 could save seniors a lot of money because they would only have to pay for only one transaction.

Detrick said,"Prop 5 is great for the consumer... it says that it is unreasonable and unnecessary expense for the consumer looking to tap into the equity in their homes to go purchase another house." He estimates it could save consumers $3,000 to $5,000.

Detrick even said "Quite frankly I am unaware of any negatives to it"

It's not only good for the consumers but it's also good for the lenders.

"But its good for the lender. The lender does not make money by talking about making loans. They make money by closing and making loans. Proposition 5 will position our seniors 62 years or older to be more efficient in downsizing tapping into their equity to go buy something else," said Detrick.

The proposition actually strengthens property owner's rights and consumer protection.

"It does strengthen consumer protection requires a complete disclosure by the lender 12 days in advance of the close of the transaction if you are doing it for the purchasing of another home," said Detrick.

Texas is the last state to amend something similar to Proposition 5.