Reverse Mortgage for Purchase or HECM for Purchase

Reverse Mortgage For Purchase CaliforniaAllows seniors to buy a more expensive home without incurring a monthly mortgage payment.  Many BUYERS, who may not otherwise qualify for a traditional mortgage, are now able to buy a home using the Reverse Mortgage for Purchase Program!

If you are 62 years or older, the Home Equity Conversion Mortgage (HECM) for Purchase Loan may help you buy your next home without required monthly mortgage payments.

Reverse Mortgage for Purchase is a Federal Housing Administration (FHA) insured home loan that allows seniors to use the equity from the sale of a previous residence to buy their next primary home in one transaction. Regard- less of how long you live in the home or what happens to your home’s value, you only make one, initial investment (down payment) towards the purchase.

Why Consider the Loan?

No matter what your needs may be, a HECM for Purchase Loan may help:

  • Eliminate monthly mortgage payments
  • Increase your purchasing power
  • Payless upfront investment  than a cash purchase
  • Right-size to a smaller,lower maintenance home
  • Buy a home closer to family or friends
  • Lower your cost of living during retirement
  • Enjoy care free living in a senior housing community

Safeguards for Borrowers

  • Mortgage Insurance Premium(MIP) ensures the amount owed on the loan can never be more than the value of the home at time of sale
  • Independint HUD counseling is required prior to loan application
  • Lender may only look to the value of the home for repayment; no other assets may be attached if the loan balance grows beyond the mortgaged home value (non-recourse loan)

 

Eligibility

The amount of money you may receive from a Reverse Mortgage for Purchase Loan depends on the age of the youngest titleholder, current interest rates and the lesser of the appraised value, the purchase price or the FHA lending limit.

  • Youngest title holder must be 62 years or older
  • Purchased home must be a primary residence
  • Occupied within 60 days of loan closing
  • Property must be a single family home, 2-4 unit dwelling, or a FHA approved condo
  • The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of prior residence, home buyer’s other assets or savings
  • Borrower must complete a HUD approved counseling session


Reverse Mortgage Purchase Program will help you market to a group of “HOME BUYERS” you may never have marketed to before!

HECM for Purchase Guidelines:

•Must be 62 or older
•Minimal income or credit qualifications
•Home must be primary residence
•Lending limit is $625,500
•Home must meet FHA appraisal requirements
•Gift funds ARE allowed
•Eligible properties:

~ Single Family Homes and Townhouses

~ Planned Unit Development (PUD)

~ FHA Approved Condos, 2-4 unit properties

To find out how much cash is required to purchase a specific property, all I need from you is the purchase price and your Buyers age.  It is that simple! Use our Reverse Mortgage Purchase Calculator or give me a call at (800) 887-7567

HECM for Purchase Products

Refinance – available as a HECM Fixed rate or Adjustable rate option (based on LIBOR index) to meet a variety of needs

HECM Fixed rate option – rate remains fixed for life of loan

HECM Adjustable rate option – based on the LIBOR index with multiple margins to choose from

HUD HECM for Purchase – also available as a HECM Fixed rate or Adjustable rate option

 

HECM Proceeds Options

Tenure – provides equal monthly payments over the life of the loan

Modified Tenure – combines line of credit with monthly payments for as long as one borrower remains in the home

Term – provides the largest monthly payment. Borrowers determine the term of payment (5yrs, 10yrs, 18 yrs etc.)

Modified Term – combines line of credit with monthly payments for a fixed number of months

Line of Credit – funds are drawn as needed from line of credit until exhausted. The amount of cash available grows larger each month until then (growth rate)

Credit Line Growth Rate

The credit line growth rate is based on the current note rate and loan product plus monthly mortgage insurance premium (MIP)

The options above are only available with adjustable rate (LIBOR) products

Single Disbursement Lump Sum Option

all available funds received at disbursement (required for Fixed rate HECM). No additional funds available after loan closing.

You can also change payment options during the HECM for Purchase loan with the LIBOR – adjustable rate product