HECM For Purchase: What You Should Know
If you (or your spouse) are at least 62*, you may be able to take advantage of a Home Equity Conversion Mortgage for Purchase (H4P for short). A HECM is a Reverse Mortgage. The H4P lets you purchase a new home with approximately 50% down, depending on interest rates and age, helping you retain more of your financial nest egg.
To make things even better, with H4P, you'll never make a mortgage payment as long as you live in the home and keep your taxes, insurance and HOA dues current.
H4P Offers Home Buyers Powerful Advantages
- Greater home purchasing power
- The ability to move into a home (and location) that better fits your needs
- Reduced out-of-pocket expenses by not having a monthly mortgage payment**
- Being able to retain more of your life savings
- You keep the title to your home***
H4P Buyer Requirements
To be eligible for this exciting program:
- You or your spouse must be at least 62 or older*
- You must intend to occupy the property as your primary residence (vacation and rental homes are ineligible)
- The money used for the down payment must come from your checking, savings, investments, gifts or an existing home sale (the funds cannot be borrowed)
- You must be able to maintain the home and pay property taxes plus insurance and HOA dues
- Financial Assessment Required
Other requirements may apply.
H4P Down Payment Matrix
The matrix below demonstrates the increased home purchasing power gained by Americans (62-and-older*) who use H4P. To use the matrix, match your age with the desired home purchase price. The number where the age and purchase price intersect is the amount of the out-of-pocket payment you will need at closing.
For example, a 65-year-old who wants to purchase a $400,000 home must provide an out-of-pocket payment of $283,935. The remainder of the balance ($116,065) is funded by a reverse mortgage loan.
Ready To Get Started?
For more information, please contact us today to learn more about HECM for Purchase and whether it may be the right solution for your home buying goals.
Important Disclosures
*In Texas all borrowers must be 62 or older.
**Must maintain property as primary residence and keep property taxes, insurance and HOA dues current.
***Must comply with terms of mortgage.
This calculation is based on using HECM Fixed Rate of 6.810% as of January 30, 2023. Recent APRs range from 8.23%-8.98% APR. Loan charges will include origination fees, mortgage insurance premiums, and settlement costs which are to be determined. Most of these fees may be financed into the loan. Interest rates and funds available may change without notice and may not be available at the time of loan commitment. Prices subject to change. This information is for illustrative purposes only. Estimated closing costs, including upfront FHA mortgage insurance premium, range from $3,000 to $45,750 depending upon the value of the home. Closing costs vary from state to state and can affect out-of-pocket costs. Please consult your HECM Loan Officer for actual figures. Your loan balance and accrued interest will become due upon a maturity or default event such as no longer living in the home as your principal residence, failing to pay hazard insurance or property taxes, or failing to maintain your property.
