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 Reverse Mortgage Loan for Purchase

What is the Home Equity Conversion Mortgage (HECM) for Purchase?

  • An FHA-insured reverse mortgage loan
  • Enables homebuyers, at least 62 years of age, to purchase a new primary residence and obtain a reverse mortgage loan in  simultaneous transactions without the required monthly mortgage payments of a traditional mortgage.
  • Allows buyers to combine reverse mortgage loan proceeds with a down payment from their current home sale or other assets, to purchase a new home.
 
 

Here's an example of how to buy a home with a Reverse Mortgage:

Step 1

Gloria (62) and Ted Stuart (64) want to buy a more accomodating single story home. They are working with real estate agent Mark to sell their current two-story home. In a separate transaction, they look into buying a new single story home in a  new 55+ housing development.  The Stuarts meet with Mark and look at several homes priced at $200,000. 

Step 2

Mark introduces the Stuarts to a Pat, a Reverse Mortgage Specialist who explains the process.  Pat shows them how a reverse mortgage loan for purchase could provide the additional funds they will need:

Purchase Price                             $200,000.

Reverse Mortgage Proceeds             104,800.

Cash Required to Close                     111,002.

(remainder of  the purchase price & closing costs)

Step 3

The Stuarts combine the $111,002 from the sale of their departure home with the $104,800 proceeds from the reverse mortgage loan to purchase a new $200,000 home without required monthly mortgage payments of a traditional mortgage. They are able to buy more home for their money and eliminate monthly payments.  They are only required  to maintain Homeowner insurance and pay property taxes and any HOA fees. 

 

 

 

 

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