You Can Afford To Move Up
According to the National Association of Realtors, fewer buyers signed contracts to buy existing homes in May, likely because they can't find or afford what they want. The pending home sales index dropped 0.8% month-to-month and is now 1.7% lower than May 2016. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast. The supply situation has buyer confidence in the housing market dropping. While about 80% of current homeowners think now is a good time to buy, they are not listing their homes for sale. This may have more to do with weakening affordability than anything else. They don't want to sell if they can't afford a move-up home.
For homeowners 62 or older who have been thinking about moving into a more desirable home but are reluctant to do so because of a lack of confidence, there is a solution. The Home Equity Conversion Mortgage Purchase program or more commonly referred to as the HECM for Purchase or Reverse Mortgage Purchase is providing homeowners with the option of buying a home mortgage-free without having to pay the full sales price. The way it works is it requires approximately 50% down payment at closing and the reverse mortgage finances the other 50%. This allows a buyer to double their purchasing power to either help them buy a more expensive home or keep more cash in their hand for retirement. Example: John is going to sell his home and make $200,000, but he hesitates to sell because he can't find any homes he likes for $200,000. With a HECM for Purchase (H4P), he can qualify to buy a home for up to $400,000 with putting his $200,000 down at closing. However, he doesn't need to go that high because he found a house he likes at $300,000, puts $150,000 down and still has $50,000 in the bank for retirement spending. Like John, many homeowners are now realizing that they too can take the steps to sell their home and buy the home they really want using a H4P. Don't sit on the sidelines, and find out now how this program can help you.
Rick R. Rodriguez
Certified Reverse Mortgage Professional (CRMP)
NMLS# 473353
Toll Free (877) 500-0454
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