Home Equity Conversion Mortgage – Financial Professionals
Financial professionals have established themselves as “Trusted Advisors” for their clients.
Many times, senior clients seek financial advice, including home and mortgage questions from their trusted financial professional. In today’s changing economic times, one of the most common questions today is what can you tell me about Reverse Mortgages?
Reverse mortgages provide many advantages for the senior borrower:
- Provides access to their home equity without the requirement of monthly mortgage payments. Borrowers must continue to meet ongoing property obligations such as homeowner’s insurance and property tax payments.
- Could allow senior to purchase a new home with no monthly principal and interest mortgage payments
- Could provide source of cash flow while borrower allows their investments to recover from market losses
- Improves a senior’s standard of living or allows them to live out their dreams
- Pays off existing mortgage freeing up monthly cash flow which would have been committed to ongoing mortgage payments. With the reverse mortgage, there are no more required principal and interest mortgage payments. Borrowers are required to continue making payments for homeowner’s insurance and property tax charges and obligations.
- Allows the senior to maintain their independence while living in their own home
- Provides money for in-home health care or medical expenses
- Proceeds received from a reverse mortgage typically do not affect Social Security or Medicare.
As a Trusted Advisor, it is imperative that you can provide accurate and timely answers about today’s reverse mortgage.
Home Equity Conversion Mortgage for Purchase (H4P)
The Home Equity Conversion Mortgage (HECM) for Purchase (H4P) home financing program can help you sell more homes, by making it easier for people age 62 and older to buy the home they desire.
What is H4P?
Home Equity Conversion Mortgage for Home Purchase (H4P)
Did you know senior borrowers age 62 and older can use a Home Equity Conversion Mortgage (HECM) to purchase a home? Many senior borrowers have heard about the benefits of paying off an existing mortgage utilizing a reverse mortgage.
However, many are still unaware that they can also purchase a new home by combining a reverse mortgage with a down payment. This enables senior borrowers to purchase a new home without having to worry about making monthly mortgage payments (borrowers must remain current on property taxes, homeowner’s insurance and HOA dues). The HECM for home purchase also has limited income and credit requirements, many consumer safeguards, is FHA-Insured and HUD regulated!
- Homeowner must remain current on property taxes, homeowner’s insurance, HOA dues and routine home maintenance
- Must be 62 years of age or older
- Home being purchased must be the primary residence
- No Builder or Seller concessions allowed
- Competitive fixed rate and adjustable rate mortgage available
- The amount of money qualified for depends on age, home value and interest rate at the time of the loan
- Limited income and credit requirements
- New Construction – Certificate of Occupancy must be issued prior to application
- Non-Recourse Loan: Borrower will never be personally liable for more than the home’s value at the time of sale and cannot leave themselves or their families in debt