Reverse Mortgage for Purchase
Live Mortgage-Free in a New Home with Reverse Mortgage for Purchase
Did you know that you can convert the equity you have built in your existing home into the opportunity to live in a new home, mortgage free? Reverse mortgage for purchase is a special financing opportunity that allows qualifying senior citizens to move into new homes and obtain a reverse mortgage in the same transaction.
The Basics of Reverse Mortgage for Purchase
Reverse mortgage for purchase is also known as HECM for purchase. HECM stands for Home Equity Conversion Mortgage, a program that was created by the U.S. Department of Housing and Urban Development (HUD). HECM for purchase is regulated by the federal government but funded entirely through private lenders.
In a reverse mortgage for purchase contract, a qualifying senior sells his or her existing home and uses the funds from that sale toward a down payment on a new principal residence. At the same time, he or she enters into a new loan contract with a mortgage provider. Payments on this loan are deferred, allowing the borrower to live in his or her new home, mortgage free.
HECM for purchase contracts allow a homeowner to live in his or her new home until the end of their lives or until they choose to terminate their contracts by moving or paying off their loans. After a borrower passes, his or her family is given the opportunity to pay off the remainder of the loan and keep the home, or they may choose not to, and the home will be sold to pay off the remainder of the loan. It is important to note that even if the home sells for less than what is due on the loan, the loan is considered settled at that point, and family is never held responsible for the difference.
Borrower and Property Eligibility for HECM
To receive a reverse mortgage for purchase, borrowers must:
- Be at least 62 years old.
- Own their existing property outright or have substantial equity built in it and can pay the remainder of their existing loans before moving in a new residence.
- Commit to living in their newly HECM purchased home as a primary residence.
- Be able to continue to pay additional living expenses, such as property taxes and homeowner’s insurance.
- Not have federal debt.
Eligible HECM for purchase properties typically include:
- Single-family homes
- 2- to 4-unit properties in which the borrower lives in one of the units
- HUD-approved condominiums
- FHA-approved manufactured homes
Live Securely with a Reverse Mortgage for Purchase
Our reverse mortgage for purchase clients choose this lending option for all types of reasons. Whether you would like to move into a more accessible home, want to live closer to family or simply would like to start fresh in a new home, HECM for purchase can have great benefits for you.