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HECM For Purchase
Home Equity Conversion Mortgage / Reverse For Purchase
A Home Equity Conversion Mortgage (HECM) for Purchase is a Reverse Mortgage that allows seniors, age 62 or older, to purchase a new home to be used as their principal residence, using the loan proceeds of a Reverse Mortgage.
What is the difference between a HECM for Purchase verse a traditional mortgage?
BORROWER'S AGE
HECM for Purchase: Exclusively for home buyers age 62+.
Traditional mortgage: No age restriction (except being legal age to enter a contract).
REPAYMENT REQUIREMENTS
HECM for Purchase: Flexible repayment feature — The borrower can choose to repay as much or as little as they like each month, or make no monthly principal and interest payments. The flexible repayment feature makes it easier for a buyer to afford the home they really want, preserve more savings and retirement assets, and improve cash flow. As with any mortgage, the borrower must keepcurrent with property-related taxes, insurance and maintenance as part of their ongoing loan obligations. Repayment is generally required once they sell the home, pass away, move out or fail to meet their loan obligations.
Traditional mortgage: Monthly principal and interest payment required. Builds equity as the loan is paid down.
DOWN PAYMENT AMOUNT
HECM for Purchase: Required down payment between approximately 45% and 62% of the purchase price, depending on buyer’s age or Eligible Non-Borrowing Spouse’s age, if applicable. (This range assumes closing costs will be financed.) The rest of the funds for purchase come from the HECM loan. This allows the buyers to keep more assets to use as they wish, as compared to paying all cash, while still having the flexibility of no required monthly mortgage payments.
Traditional mortgage: Typically requires a smaller down payment.
ELIGIBLE PROPERTIES
HECM for Purchase: Single-family homes; FHA-approved condominiums; townhouses or Planned Unit Developments (PUDs); 2-to-4 unit homes that are owner-occupied; and manufactured homes meeting HUD guidelines.
Traditional mortgage: Single-family homes; condominiums; townhouses or Planned Unit Developments (PUDs); 2-to-4 unit homes that are owner-occupied; manufactured
housing;second homes; vacation homes; and investment properties.
PROTECTION AGAINST INHERITING A DEBT
HECM for Purchase: A Federal Housing Administration (FHA)-insured program, HECM for Purchase has a non-recourse feature, which means the borrower can never owe more than the home is worth when the loan is repaid. The home is the only source of repayment regardless of the loan balance at maturity.
Traditional mortgage: Most do not have a non-recourse feature. Since home values can decline, the borrower could owe more than the home isworth.
Contact us today for your FREE reverse mortgage loan consultation.
This material is not provided by, nor was it approved by the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). It is not intended to be a substitute for legal, tax or financial advice. Consult with a qualified attorney, accountant or financial advisor for additional legal or tax advice.
*There are some circumstances that will cause the loan to mature and the balance to become due and payable. The borrower(s) must continue to pay for property taxes and insurance and maintain the property to meet HUD standards or risk default. Credit is subject to age, minimum income guidelines, credit history, and property qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.
Retirement Mortgage Specialists
Kenny Hawthorne
NMLS #1647665
Ken Kennedy
NMLS #1627908
Branch Location:
605 S Orchid
White Oak, TX 75693
Phone: 903-235-7114
Powered by OC Home Loans, Inc
NMLS: 1842513
This licensee is performing acts for which a mortgage company license is required. OC Home Loans, Inc., is licensed by the Texas Department of Savings and Mortgage Lending, NMLS: 1842513. Loan approval is not guaranteed and is subject to lender review of information. All loan approvals are conditional and all conditions must be met by borrower. Loan is only approved when lender has issued approval in writing and is subject to the Lender conditions. Specified rates may not be available for all bo rowers. Rate subject to change with market conditions. K2--Financial, LLC is an Equal Opportunity Mortgage Broker/Lender. The services referred to herein are not available to persons located outside the state of Texas.
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