The Home Equity Conversion Mortgage (HECM) for Purchase allows seniors at least 62 years of age to purchase a home through a reverse mortgage. This can be a valuable option for seniors who desire a new home that better meets their physical needs, wish to move closer to family members, want to get a fresh start or simply wish to downsize. Since this is a reverse mortgage product, monthly payments are not made on the new house. You enjoy your new home without making a monthly payment!
Unlike the traditional reverse mortgage, HECM for purchase loans require a down payment which you must pay with your own cash. The funds can come from the sale of your existing home, from investments or from savings. You cannot borrow the funds for your down payment. Typically the down payment required is based on the borrower’s age so the older the borrower is, the lower the down payment requirement will be. HECM for purchases are subject to the same guidelines as a standard HECM loan.
These loans do not take a long time to obtain. Generally you can expect a 30 day period of time start to finish just as you would have with any other purchase loan. Realtors can help their senior clients by letting them know about the Reverse For Purchase option.