The HECM(or Reverse Mortgage) for Purchase is a fantastic tool that allows seniors at least 62 years of age to purchase a home for approximately half price. This can be a valuable option for seniors who need a new home that better meets their physical needs, or who wish to move closer to family members. Since this is a reverse mortgage product, monthly payments are not made on the new house.
Unlike the traditional reverse mortgage, HECM for purchase loans require a down payment. Typically the down payment required is based on the borrower’s age. The older the borrower is, the lower the down payment requirement will be. HECM for purchases are subject to the same guidelines as a standard HECM loan.
The HECM for Purchase is a tremendous product for a few reasons. First, a senior will purchase their home for about half price. Instead of either buying their ho
Here's an example of how it works. Martha and Bob Smith are 73 and want to downsize. Their current home is too big, and they would like to move to a retirement community. They find a perfect home that's on the market for $300,000. Before learning about the HECM for purchase, they were going to pay for the home in cash.
One day Martha's realtor advised her to look into a HECM for purchase. Martha read about it and was elated! Now, instead of paying $300,000 in cash for the home Martha and Bob are only paying $150,000. The reverse mortgage is carrying the other $150,000 and Martha and Bob aren't making monthly payments. They put the remaining $150,000 back into their retirement account. Now Martha and Bob are happy because they aren't making mortgage payments AND have more cash in the bank!
If you would like to learn how a HECM for purchase works, give us a ring at (267) 289 1095!