Can You Use Reverse Mortgage For A New Home Purchase

reverse mortgageA reverse mortgage is becoming increasingly popular among seniors. Thanks to the HECM program, the elderly who are on their retirement years can tap into their home equity. They can turn it into a source of income which they will receive every month without having to worry about moving out of their homes. They can use the additional cash they get from the loan to remodel their house or pay for their expenses. Reverse mortgages can also help seniors purchase a new house in retirement.

Reverse Mortgage: HECM For Purchase Program

HECM or Home Equity Conversion Mortgage for Purchase Program helps seniors purchase a new primary house. It makes the home buying and selling process much easier by consolidating them into one transaction. This process saves them money but cutting back on their living costs. Seniors who downsize could also use the remaining cash for other reasons.

In case you qualify for a home equity conversion mortgage for purchase program, you don’t need to pay a mortgage bill every month. You don’t even have to pay back the loan until you decide to move out or after your passing. And because, it is a non recourse type of loan that is backed by the FHA. You don’t need to pay back more than the home’s value, even if the balance of the Myrtle Beach reverse mortgage is much higher.

HECM for Purchase Loan Qualification

  • Homeowner must be at least 62 years old
  • The house to be purchased should be the primary residence
  • The purchase must be done within the 60 day period following the closing date
  • The new house must be a single family home, two to four unit house, or a condo that is according to the requirements of the FHA.

Myrtle BeachHow much you can borrow through this program will be influenced by several factors. For instance, your lender will take into account the various factors. These include the youngest borrower’s age, the appraised value of the house, downpayment size, and the current interest rates. Fortunately, you don’t have to worry about your household income. Also, your credit score won’t affect your odds of qualifying for the loan. Generally, if the borrower is older, the more money they will be able to get.

Costs To Consider

Apart from the downpayment, you also need to know that you have to pay for fees like property taxes and closing costs. You have to shoulder the mortgage insurance premiums as well. You’ll have to make the first payment upfront. Then, the remaining amount will be paid over the lifespan of the reverse mortgage loan in Myrtle Beach.

Even though you can avoid paying the closing cost, you can still negotiate the costs. That’s the reason why you have to shop around for the very best rates first. Obviously, when the cost of obtaining an HECM loan outweighs the offered benefits, then you may have to find a different financing option.

If you’d like to downsize or move in retirement, the HECM for Purchase loan could be a good solution. However, before you decide to apply for one, you should find out first if it is the best financial option for you and your family.

For guidance, don’t hesitate to get in touch with David Stacy Reverse Mortgage Specialist. Call us now.

David Stacy Reverse Mortgage Specialist
Myrtle Beach, SC 29577
(843) 491-1436

We serve all of Horry County including: North Myrtle BeachCarolina Forest, Socastee, Forestbrook, Conway, Surfside BeachLittle River, Myrtle Beach, Forestbrook