Are you are a cash buyer looking to purchase a Delaware home?
Did you know that if you qualify, you can utilize a Home Equity Conversion Mortgage to buy 50% more home and have no mortgage payments?
How can that be? We asked Nick Quercetti, Jr., a Reverse Mortgage Planner at Fairway Independent Mortgage Corporation in Rehoboth Beach about this little known use for a reverse mortgage…
How Do You Purchase a Home with a Reverse Mortgage?
“By now most people should understand that a Home Equity Conversion Mortgage (HECM/Reverse Mortgage) is a safe product and not your father’s reverse mortgage. With the incorporation of many new guidelines and regulations in the last few years, the FHA insured HECM loan is beginning to be well received by financial writers and personal finance gurus around the country.
Who should consider using a HECM and for what purpose?
There are four main reasons to utilize a HECM:
- If you want to eliminate your monthly principal and interest payment (remember you still need to pay real estate property taxes, home owners insurance and general maintenance) in order to free up cash flow.
- Looking to create supplemental income in retirement
- Utilize the line of credit feature in a HECM loan as a standby line of credit for emergency use, or to mitigate what is called the sequencing of returns risk, which is to minimize the effects of a market downturn on your portfolio of investments.
- If you are looking to downsize and purchase a home, a little know use is to utilize a HECM to buy a home.
In order to qualify the youngest borrower must be a minimum of 62 years of age. This program allows cash buyers 62 years and older to qualify to purchase a home for as little as 50% to 55% of the sales price and never have to make a payment on principal and interest. You only need to pay your real estate taxes and homeowners insurance. This means senior buyers can afford upgrades to the home they would not otherwise consider.
The HECM for Purchase is a Federal Housing (FHA) insured home loan that allows seniors to use the equity from the sale of a previous residence to buy their next primary home in one transaction. Regardless of how long you live in the home or what happens to your home’s value, you only make one, initial investment (down payment) towards the purchase.
The HECM for Purchase allows seniors to move into a home that better suits their needs as they age, be in area with a more affordable cost of living, and or live in a warmer climate.”
Here is an example:
Cindy is 62 years of age and is selling her home, which she owns free and clear for $157,000. She wants to buy a lake property in a more affordable area. A Realtor® showed her three properties near a lake priced around $160,000, but not on the lake. The next day Cindy saw an open house on a property on the lake and what looked like her dream home. The Realtor® at the open house showed her the home, which had granite tops in the kitchen, a great view of the lake and steps down to the dock. Cindy told her she absolutely loved the home but could not afford the $300,000 price tag, as she did not want a mortgage. Her Realtor® told her with a HECM for Purchase she might be able to make her dream come true.
Let us answer your questions about a HECM for Purchase.
Call 302-424-1890 or email us today to see if you qualify. Then we’ll make sure you sit down with a trusted Reverse Mortgage Planner like Nick to see if a HECM for Purchase is right for you.
Got Questions for Nick Quercetti, Jr., call 302-260-7092, email nickq@fairwaymc.com or visit www.GetMyReverse.com.
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