Reverse for Purchase

Use the Reverse Mortgage to Purchase Your Next Home

Have you every envisioned what your retirement would be like? Of course, we all have, especially as we enter or near retirement age. Well, many of us may dream of making a move during our retirement. Whether it’s to a sunny community down south or closer to family in the suburbs, there’s a financial solution for those age 62 or older that can help acquire your dream home.

What is a HECM for Purchase?

A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) for Purchase is an FHA-insured loan for those 62 or older. The HECM for Purchase enables seniors to purchase a new primary residence and obtain a reverse mortgage in a single transaction. This allows buyers to combine their reverse mortgage proceeds with either the proceeds from their current home sale or other assets, to purchase their new home and have no requirement monthly mortgage payments on the new property! They must still pay their property taxes, homeowners insurance, and maintain the conditon of the home. 

How does it work?

Like any home purchase, the buyers are required to make an upfront monetary investment (See chart. Calculation determined by the Department of Housing and Urban Development.) People commonly use the money from the sale of their current home, funds in their checking, savings, or retirement account, CD’s, or other investments. When borrowers move, the HECM will rid the monthly mortgage payments on the new home. Borrower’s will still have to pay property taxes, homeowners insurance, and maintenance fees on the home. However, unlike a traditional mortgage, which can limit assets available to borrowers, the HECM for Purchase increases cash flow and provides more flexibility.
The information being provided is for illustrative purposes only. Estimated fees,including up-front FHA mortgage insurance premium, range from $3,125 to $15,000 depending upon the value of the home. Closing costs vary from state to state and can affect down payment. Please check with your HECM specialist for actual figures. Your loan balance, including accrued interest and fees, will become due upon a maturity or default event such as no longer living in the home as your principal residence, failing to pay your hazard insurance, property taxes or homeowners’ fee, or failing to maintain your property. Fixed rate HECMs are limited to a single full draw at loan closing with no future draws. This calculation is based on youngest borrower age 75. Loan charges will include origination fees, mortgage insurance premiums, and settlement costs which are to be determined. Some of these fees may be finances into the loan. As of June 18, 2015, HECM Fixed rate is 4.75% APR range 6.680%-6.902%. Variable rate options also available. Interest rates and funds availability may change without notice and not be available at the time of loan commitment. Nationwide Equities Corporation is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

Qualifications

– at least 62 or older
– home must be your primary residence
– meet the down payment requirement

Eligible Properties

– single-family homes
– townhomes
– FHA-approved condominiums

Get in touch with one of our licensed loan officers today!

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