Los Angeles, California – December 23, 2015 – A virtually hidden secret in the home financing industry for seniors is the existence of a Home Equity Conversion Mortgage (HECM) for Purchase. While sharing some similarities with a Home Equity Conversion Mortgage (HECM), this financing vehicle is used for the initial purchase of a home. Designed for people who are at least 62 years of age, a federally insured HECM for Purchase enables these seniors to purchase a primary residence without requiring repayment of the loan and its interest unless certain criteria are triggered. According to Xavier Ramirez, a reverse mortgage loan officer with L.A. Reverse Mortgages, “Seniors can use a HECM Reverse Mortgage to purchase their dream home and escape the need for the burdensome monthly payments associated with a normal mortgage.”
Previously, certain occurrences triggered the full loan amount and interest to come due, according to HUD requirements. If the homeowner sold the home, relocated for 12 or more months or died, then repayment of the loan was immediate. This often placed an unfair burden on the spouse of a homeowner who had passed away. Xavier Ramirez notes, though, that recent amendments to the HUD rules provide better protection for the remaining spouse. “HUD developed a new set of rules designed to protect spouses, even if they are younger than 62 years of age. These rules enable spouses to remain in the home indefinitely when the primary borrower passes.”
Another key difference between a conventional HECM and one used to purchase a home is that a down payment is required for the HECM for Purchase. About half of the sales price of the home must be brought to the table by the purchaser. These funds provide equity in the home and can be obtained from the sale of a previous home, a gift from a family member or the purchaser’s savings. The money used as a down payment cannot be borrowed. The older the homeowner is, the larger the loan amount available and the less they need to bring to the closing table.
Company Name: L.A. Reverse Mortgages
Contact Person: Xavier Ramirez, Reverse Mortgage Loan Officer (NMLS: 175409)
Phone: (844) 493-7822
Country: United States