The reverse mortgage HECM purchase program can help you leverage and increase your purchasing power while buying a home. If you are the age of 62 or older and have limited funds and would like to avoid a monthly mortgage payment, then the Home Equity Conversion Mortgage (HECM) program may be the right financial product for you.The federal government just recently started allowing the usage of the reverse mortgage to purchase a home. There are two different types of reverse mortgage products you can choose from, which is the HECM Standard or the HECM Saver loan. The HECM Standard allows for more purchasing power, but comes with a bigger closing cost. You will have to determine which product best suits your financial goals.
The HECM purchase program allows you to increase your purchasing power in a big way. Typically, if you had $110,000 to put down on a home and did not want a monthly mortgage payment, then your purchasing power would obviously just be $110,000, but that might not buy what you want. Also, depending on your standard of living, for $110,000, it may not buy the type of house you are used to living in. For example, if you are 72 years old and the purchase price of the home is $250,000, you would have to put a down payment of roughly $110,000, which could come from your retirement funds, proceeds from selling another home or even gift funds from family, and the balance of $140,000 would be taken care of by the reverse mortgage HECM Standard loan. Based on a loan amount of $140,000 with a traditional loan your payment would be $710 a month, but with a reverse mortgage you will not have that monthly payment.
As you can see, based on the example provided, you would have increased your purchasing power by over 100%, but also are able to avoid that monthly mortgage payment that you don’t want during retirement.
Please fill out the contact form at the right or by clicking here and have a qualified representative contact you!
The Reverse Mortgage HECM Purchase Program
![The Reverse Mortgage HECM Purchase Program]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5