Reverse Mortgage Purchase
We are often asked, “Can you buy a home using a reverse mortgage?” The answer is yes. Sometimes you will see this loan referred to as a HECM for Purchase.
A Home Equity Conversion Mortgage (HECM) is a loan made or originated by a private lender and The Federal Housing Administration (FHA) insures the HECM loan against certain losses.
The main reasons to use the HECM for Purchase program are:
- Minimize your monthly budget
- Right Size your home to ensure your home is properly designed to live into your senior years
- Have more assets available for planning and emergencies instead of paying cash for your home
All of the basic qualifications remain the same for a HECM for Purchase Loan which are:
- At least 1 member on title must be 62 years old
- The buyers must occupy the home as a principal residence within 60 days of purchase
- Pay ongoing property taxes and homeowner’s insurance, homeowner’s association dues if applicable
- Maintain the residence in good working order.
The available loan amount or principal limit is determined by the age of the youngest borrower, the expected interest rate, and the lesser of the purchase price, appraised home value, or the FHA maximum lending limits which are currently $636,150. Although this sounds complicated, it only takes a few minutes to input and we are able to provide the information for you in a timely manner.
When considering a HECM for purchase, we ask 3 main questions:
- Is the home designed correctly for your long term needs?
- Is your personal budget designed for long term success?
- What are the specific numbers for you and does it meet your financial goals?
When we talk about the design of your home, we want to make sure seniors have easy access around the living area and we recommend the bedrooms should be on the main floor. The location of your home should be close to family and friends so you have a great support network. The place where you live should be close to your doctor or a quality medical facility. We want to ensure the home and the financials make sense for you.
Contact Us at Sound Financial Mortgage LLC
If you are looking for a reverse mortgage company who will provide in-depth education on the HECM for purchase program, we would be glad to help. Please call us at (425) 427-9377, email at john@soundreverse.com, or request additional information to see how a HECM for purchase would work for you.
