Reverse Mortgages

Reverse Purchases

The Home Equity Conversion Mortgage (HECM) for Purchase allows seniors at least 62 years of age to purchase a home using a reverse mortgage. This can be a valuable option for seniors who need a new home that better meets their physical needs or who wish to move closer to family members. Since this is a reverse mortgage product, monthly payments are not required on the new house. 

Unlike the traditional reverse mortgage, HECM for purchase loans require a down payment, which you must pay with your own cash.  Typically the down payment required is based on the borrower’s age and the amount of the purchase.  The older the borrower is, the lower the down payment requirement will be. HECM for purchases are subject to the same guidelines as a standard HECM loan. 

A reverse mortgage is a loan available to seniors age 62 and over which allows them to convert equity in their home into cash, monthly payments, or line of credit. These loans were created to give seniors access to cash for expenses such as home improvements, unexpected medical costs, and in-home care by utilizing the accumulated equity in their homes.

This type of loan is called a reverse mortgage because instead of the borrower making monthly payments to their lender, as they would with a traditional mortgage, the lender makes payments to the borrower. Unlike a traditional home equity loan or second mortgage, a reverse mortgage does not have to be repaid until the borrower no longer occupies the home as their primary residence. The borrowers responsibility is to pay the taxes, keep the property insured, and maintain the property in "average condition".

The most common reverse mortgage is the Home Equity Conversion Mortgage (HECM) which is insured by the FHA. An alternative option is the Proprietary Reverse Mortgage which is not backed by the federal government.  

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