Now you have the ability to purchase a home with a Reverse Mortgage. This is a great addition to the reverse mortgage field. With a reverse mortgage purchase, seniors, age 62 and older can now purchase a new primary residence, using a reverse mortgage for a portion of the purchase price and never have to make a monthly mortgage payment as long as they live in the home and continue to pay costs associated with home maintenance, property taxes, and homeowner’s insurance.
HOW DOES IT WORK?
The HECM Purchase is very similar to a typical reverse mortgage.
The difference is that instead of taking the equity out of an existing property, you would be making a down payment on the home for the amount that your mortgage does not cover. For example, if you were age 62, you would need to make a down payment of approximately 50%. At age 72 that number goes down to 40% and at age 82 it would be about 30%. The funds for your down payment must be verified. Gift funds may be used only if the donor is the borrower’s relative, the borrower’s employer or labor union, a charitable organization, a governmental agency or public entity that has a program to provide homeownership assistance to low- and moderate-income families or first-time homebuyers, or a close friend with a clearly defined and documented interest in the borrower. You may not borrow additional funds from any other source. Borrowers are subject to a financial assessment.
Eligible properties include; 1 – 4 units homes, approved FHA condos, and new construction homes are acceptable once the Certificate of Occupancy has been issued.
WHO COULD BENEFIT?
Contact me today, to find out if a Reverse Mortgage will benefit you on your next purchase.