HECM For Purchase

HECM for purchase

Thanks to new provisions that were added as part of the 2008 Housing and Economic Recovery Act, it's now possible to take advantage of a reverse mortgage program and use it as a purchase mortgage.

Make a reverse mortgage work for you when buying.

Here's how it works: A senior buys a home by making a sizeable down payment, but has no actual monthly mortgage payments.. An example would be a buyer of an age of around 65 using a HECM for more than half of the purchase price at today'smortgage rates. He could buy a $250,000 home and have to pay only about $120,000 as a down payment and never again would he need to make a house payment.

As a non-recourse loan, the borrower will never owe more than the value of the property. He will owe the amount borrowed plus interset and insurance. But if the house loses value, FHA insures the difference so heirs are not stuck with bill. If the house appreciates in value beyond the amount of loan, then the homeowner or heirs receive the profits.

Today, many seniors are downsizing with a HECM by selling their current home and then using some of the proceeds as their reverse mortgage down payment, and then pocketing the rest to fund retirement or spend.