Purchase a Property in your Retirement with a Reverse Mortgage Purchase Loan in 2012- The HECM reverse mortgage purchase program has been around since 2009, it gives senior homeowners the option to buy a new home, downsize, all with a reverse mortgage loan.

What are the basic qualification for seniors who want to use HECM to purchase a home

• must be at-least 62 years or older
• must have never defaulted on government debt
• have a sufficient down payment or enough equity in the home
• must be your primary residence the one you want to take a HECM on

lets start with a simple example of how the a reverse mortgage loan works ( typical one ) and a purchase HECM loan. Lets take the example of Jim & Sally both 62 their home is worth $200K and they owe $120K on their current mortgage.

With a reverse mortgage the bank lender would extend around 60% of the homes value – so in this example $120k would be available to Sally and Jim – they would pay off the forward mortgage and would then receive $20,000 as a lump sum.

How how does a purchase reverse mortgage work

using the same numbers from above – with the only difference in that they do not own a home but instead are interested in purchasing a home. These borrowers would be responsible for the $80K as a down payment to then qualify for a reverse mortgage of $120k to buy a $200k without every having another mortgage payment ( the $200k is the new home sale price – notice in the above example how $120k was the reverse mortgage proceeds – this is the same here only difference is that since you do not own the home to begin with you need a down payment to be able to qualify for the HECM purchase. )

*there are currently changes to the reverse loan which includes HUD approving the ability for lenders/banks to check your income and credit scores for these loans ( we currently have lenders who will not take this into consideration – now is a good time to consider this loan option.)

Benefits of using a reverse mortgage for purchasing a new home:

• never pay a mortgage
• you own the home
• live in the new home for life
• move closer to family
• move to a state with better weather (FL)
• buy a new home, downsize, move
• keep more of your money towards retirement

“We have experience a surge in senior homeowners who have had plans to move or downsize but who would have never been able to afford monthly payments. If you have plans to move closer to family, into a dream home, or just downsize this wont be an issue with the reverse mortgage loan to buy.”

The typical down payment required for the HECM purchase loan to work is around 40-50% – this can be as high as 60% depending on your credit score, income, location, and which bank you are planning on working with.

With a traditional mortgage or with selling your home and then buying a new home you are likely to need a forward mortgage which comes with monthly payments. The qualification process is very hard for seniors since most will not have the income or credit score high enough for an approval.

Regular mortgages are very tough to qualify for since the economic downturns, the government back reverse mortgage allows seniors to easily qualify in order to meet their senior housing needs. This including both using the reverse mortgages for your current home or for any home you plan on buying.

HECM Purchase Loan is federally insured, so it is a safe option/tool for seniors to consider, it will allow you to purchase a downsized home without having to come up with the down payment. Also no mortgage payments will be made on the new home when you decide to downgrade your home.

for more info visit

what is a reverse mortgage
how does a reverse mortgage work
reverse mortgage calculator
reverse mortgages pros and cons
reverse mortgage loan
reverse mortgage information