Seniors 62 years or older can utilize a reverse mortgage to gain access to cash through the accumulated equity in their homes. Many seniors throughout San Antonio, Austin, and Corpus Christi are in need of extra cash to pay for medical expenses, home improvements, groceries, in-home care, and other unexpected costs. A Home Equity Conversion Mortgage (HECM) loan provides seniors with this much-needed cash.
While unknown to many seniors, the Home Equity Conversion Mortgage can also be used to purchase a new home. The HECM for purchase makes it possible for seniors to move into a new home without ever having to make mortgage payments. For seniors who need a new home that is a better fit for their physical needs, or who wish to move closer to family members, the HECM for purchase can be a valuable option. Using a reverse mortgage to purchase a home allows seniors to keep cash in other investments for further growth rather than spending it on a house.
Unlike the traditional reverse mortgage, HECM for purchase loans do require a down payment. This down payment will need to be paid with your own cash. Typically, the down payment required is based on the borrower’s age. The down payment requirement decreases as the age of the borrower increases. The down payment can be gifted from a family member, much like a standard FHA loan, but it cannot be borrowed.
HECM for purchases are subject to the same guidelines and requirements of a standard HECM loan.
To qualify, a HECM for Purchase Borrower must:
- Be at least 62 years of age
- Own their property outright or have a low mortgage balance
- Occupy the home as their primary residence
- Not be delinquent on any federal debt
- Have the ability to pay ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
- Participate in a reverse mortgage information session given by an HECM counselor approved by the U.S. Department of Housing and Urban Development (HUD)
Texas Properties Eligible for HECM Purchases:
- Single-family homes
- 2-4 Unit homes with one of the units occupied by the owner
- HUD approved Condominiums
- FHA-approved manufactured homes
- Must meet all of the FHA’s property standards and flood requirements
As with traditional HECM loans, a borrower’s income, expenses, and credit history will also be reviewed and verified by the lender.
A HECM for purchase loan can be one of the best financial tools that seniors have access to. The ability to relocate to a more suitable home without incurring a monthly mortgage payment or expending retirement assets can be invaluable to seniors.
At TerraVista Mortgage, we want to make sure we provide all of our clients with the necessary information to make an educated decision on whether or not a reverse mortgage for purchase loan is the right choice for them. We specialize in traditional reverse mortgage and reverse mortgage for purchase loans for purchase throughout San Antonio, Austin, and Corpus Christi. For any questions you may have about the HECM for purchase program, contact us today!