Buy a Home With a Reverse Mortgage
The Home Equity Conversion Mortgage (HECM) program, which is more commonly referred to as a "reverse mortgage", has become more widely recognized these days due to increased exposure from mainstream media. More and more homeowners, realtors and financial professionals are coming to understand how a reverse mortgage works. One area of reverse mortgages that is still new to many people is the HECM for Purchase (H4P) option. This allows a borrower who is 62 or older to use a reverse mortgage to buy a principal residence. It's becoming increasingly popular as more and more senior homeowners continue to sell and buy homes. The National Association of Realtors conducted a recent survey titled "Home Buyer and Seller Generational Trends" which shows a trend emerging among baby boomers. The findings show that 30% of baby boomers (nearly 24 million people) have recently purchased a home, and that 43% (roughly 33 million) have recently sold a home. There are different motivations that are fueling this demand to buy and sell, however one thing for sure is that this segment of the population is making an impact on the housing market.
The H4P can help a buyer to increase their buying power while still enjoying the luxury of not have a mortgage payment. Let's see an example. Ted, who is 70 years old, has just sold his home and is relocating to be closer to his family. He received $200,000 from the sale of his house. He is looking for another one-story house with varying amenities that will help him age in place comfortably, and he does not want to have a monthly mortgage payment. Unfortunately, the price of homes that offer the amenities he is looking for are well over $300,000. Ted is faced with the likelihood of settling for a home that does not meet his needs. Until, he learns about the H4P program and how he can double his buying power. Based on his age, Ted can use the H4P to borrow approximately 50% of the purchase price which allows him to qualify for a home price of up to $400,000 with his $200,000 cash on hand. Now, he is able to accomplish his goal of finding the right house while still not having to make a mortgage payment.
I have been educating realtors and homeowners on this product for several years now, and I believe that the H4P makes sense for a lot of people. I am a Certified Reverse Mortgage Professional and I am licensed nationwide to help you buy a home using a reverse mortgage. Contact me anytime to discuss how this program can work for you.
For more information on reverse mortgages and other related topics contact:
Rick R. Rodriguez
Certified Reverse Mortgage Professional (CRMP)
NMLS# 473353
Toll Free (877) 500-0454
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