A home equity conversion mortgage (HECM) for Purchase loan is a type of FHA insured mortgage that is available to homeowners 62 or older who own their homes entirely or owe very little on them. This program allows these homeowners to purchase a new home using a reverse mortgage loan, and this money is repaid to the lender when the borrower sells or vacates the house. This program was designed to allow senior homeowners to downsize or relocate and obtain a reverse mortgage within a single transaction. With a HECM for Purchase, the borrower must have enough funds to make the down payment, and, as with all HECM loans, the homeowner is required to maintain the home and pay property taxes and insurance.
There are many factors to consider when applying for a HECM for purchase and this reverse mortgage loan is not for everyone and not everyone will qualify. However, here are some of the benefits of a HECM for Purchase loan:
– Ability to Switch Homes- A HECM for Purchase can help older homeowners buy a house that better suits their needs. Whether it means downsizing to a single story house or one that is handicap accessible, or relocating to be closer to family, friends, and medical facilities.
– Increased Cash Flow- HECM for Purchase loans allow homeowners to find and purchase the home best for them without using all of their retirement assets or dipping into their monthly fixed income.
– Lower Cost of Living- Since monthly mortgage payments are not required, a HECM for Purchase loan can help preserve savings and improve cash flow that can be used on other things such as medical expenses and unexpected occurrences.
Whether you’re looking to move into a new home that better suits your needs or live closer to your family and friends, the HECM for Purchase program allows you to access your current home’s equity in order to make your retirement wants and needs a reality. Remember that a HECM for Purchase loan is not for everyone. Be sure to take some time to learn more about them and understand the obligations and rights associated with this loan before entering into an agreement.