“Few things in life are as exciting and satisfying as buying a new home,” said Monte Howard, CRMP, Manager of the Reverse Mortgage Division at C2 Financial, based in San Diego. “When I show a client how they can own the home of their dreams with a Reverse Purchase, I become the key to getting something they deeply desire. They want the home and I am the one who can help them get it.”
Are you 62 years old or over and interested in purchasing a home without a monthly mortgage payment? Then a Home Equity Conversion Mortgage (HECM) purchase can be the option for you. If you’ve come to this Rick May blog post to learn about a HECM purchase then it’s good you did. We want to give you a breakdown of what the benefits are to a HECM purchase and how you should go about this process.
Let us Explain
The explanation for an HECM purchase isn’t a difficult one. An HECM purchase allows a senior citizen the ability to live in a new home without paying a mortgage while it remains their primary residence. Even though the person who receives a reverse mortgage won’t be paying a monthly mortgage payment, with a HECM purchase, the real estate taxes, homeowners insurance and HOA fees remain the responsibility of the borrower.
Bypassing the traditional process of a mortgage is in a retiree’s best interest, because the stress of keeping a mortgage up to date is very much real. Especially for those seniors whom aren’t secured with a steady stream of money.
One major reason for a senior citizen to go through a HECM purchase is to downsize from a multi-story house that may be too dangerous to reside in. No matter the situation, the reverse mortgage for purchase can be the right solution to help you or your family members move into an ideal living situation without having to pay a mortgage payment.
First things first, the Benefits
When you’ve reached the age of 62, an HECM purchase becomes a great option for you. With the proceeds of the HECM, you can
- Stop making monthly mortgage payments.
- Increase your purchase power.
- Preserve your cash.
- Right-size to a smaller, lower maintenance home.
- Buy a home closer to family or friends.
- Reduce your cost of living during retirement.
- Enjoy carefree living in a senior housing community
I think we all can agree that if we all had the option to eliminate a monthly mortgage payment, we’d all at the very least consider it. An HECM purchase can free up your cash. It’ll help you save your cash and improve your quality of living. You’ll need to uphold the obligations of the loan so that the property you choose to purchase can continue to be yours. By doing this you’ll maintain the title of that home if it remains your primary residence.
How to Qualify for a HECM Purchase
- Youngest titleholder must be 62 years or older
- Purchased home must be a primary residence occupied within 60 days of loan closing
- Property must be a single family home, 2-to-4 unit owner-occupied dwelling, FHA approved condo, or manufactured home that meets FHA requirements.
- The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of prior residence, home buyer’s other assets or savings
- Borrower must complete a Housing and Urban Development (HUD) approved counseling session
- Must meet financial eligibility criteria as established by HUD
We all want our seniors to live out their lives without the stress of having to pay their mortgages. An HECM purchase can help alleviate some of that stress. The benefits are proven and solid, with easy to understand qualifications.
Another great thing about an HECM purchase is that it also helps the heirs to the property. The heirs will have a chance to take the property over by qualifying for a new loan. If they choose not to keep the property, they won’t be burdened with it. The house will be sold, and they can be compensated if the house sells for more than the property is worth. All in all, a HECM purchase is a solid option. We’d love to keep this conversation going. Please contact us at Rick May Reverse Mortgage Specialist by clicking here to head over to our website. We are here to help in any way we can!
Chris Bruser with Retirement Funding Solutions says, and we completely agree that: “The Realtor community is vital, there’s no getting around that,” he says. “It’s going to take all of us being good stewards of the industry — not being too “sale-sy,” but making sure they understand this is not just another financing tool. This can literally change a person’s retirement.