HECM for Purchase Loan Explained – Guidelines, Closing Costs, Etc.

Many homeowners over the age of 62 are taking advantage of a new product which is a (home equity conversion mortgage) HECM for purchase loan. Guidelines and closing costs for these types of reverse mortgage differ from the traditional reverse mortgage and so do the benefits. For a rough example, imagine putting down 40% of a home’s value and not having a mortgage. That is the goal of the HECM for purchase loan.

In 2008, Congress authorized the HECM for purchase program. You can view more information directly from the government here. It has been a wild success ever since. In certain situations, this is an ideal product for those lookingHECM for purchase to purchase a new property while not paying a mortgage, if qualified. The reverse mortgage for purchase is perfect for those who wish to have their retirement funds remain liquid and not tied up in real estate.

Why is the reverse mortgage for purchases so desirable? This is because when many seniors age, they wish to move closer to family, downsize, and/or get into warmer climate. Many wish to socialize with people around their age and move into an adult community.

This is why reverse mortgages in Florida are growing so quickly. Many choose this tropical destination to retire in for the beautiful weather. However, paying a new mortgage on a monthly basis may not be an option for those on a limited, fixed-income.

HECM for Purchase Explained – What Exactly Is It?

Explaining the HECM for purchase is quite simple. This financial product will allow you to complete a reverse mortgage which will ultimately allow you to live in a new home without paying the mortgage as long as you live there. It is important to note with the HECM for purchase, you must still pay real estate taxes, homeowners insurance, and HOA fees (if applicable).

HECM for purchase is ideal for those who wish to bypass the traditional mortgage process. Once retired, gaining or maintaining a new mortgage payment can add stress to one who is restricted financially. This is why this product is so appealing to many seniors over the age of 62 years old. As seniors age, there are a multitude of reasons to purchase a new property. Perhaps a two-story home is deemed to dangerous and hazard prone. Maybe you wish to be closer to your family. Maybe arthritis is aggravated by extreme winters. No matter what the situation, the reverse mortgage for purchase can be a fantastic solution to those in need to move without a new mortgage payment.

HECM for Purchase Guidelines – What are the Qualifications?

For those that seem intrigued by the reverse mortgage for purchase, you will want to know both the HECM for purchase guidelines as well as the qualifications. Below you will find a general summary of the specific guidelines needed to be approved for this financial product.

  1. You (or the youngest homeowner) must be a homeowner over the age of 62.
  2. After the HECM for purchase, you must move in within 60 days.
  3. This must be your primary residence. (note: This cannot be an investment property)
  4. Generally, you will need a down payment of at least 40%. (note: Seller concessions not allowed)
  5. Down payment funds will need to be verified.

These HECM for purchase guidelines are just general items that are necessary guidelines for the reverse mortgage for purchase. Closing costs will vary based on many variables. Therefore, it is best to speak with a reverse mortgage specialist for any rough estimates. Visit our learning center to stay up to date with our latest blog posts.

Want More Information on a Reverse Mortgage for Purchase?

ShopReverseMortgages.com offers a unique service to help homeowners over 62 shop lenders for their HECM reverse mortgage loans for purchase. If you want more information on this unique financial product, have any questions, or would like to move forward then give our reverse mortgage for purchase specialists a call today.