Let us show you how to buy a home, keep your cash and have no mortgage payments)
By Frank Curran: Principal and resident at The Fairways at Savannah Quarters, west Savannah’s finest Active Adult community. We can be reached at 450-9876 or at www.fairways-sq.com
As an Active Adult entering my senior years I can empathize with what some surveys have suggested is this number one fear— to assure I have the cash to live my golden years at a standard of living that I have earned. Our recent economic times and the bust in housing have not helped any of us in alleviating this concern.
However, would you like to purchase your dream home, up to $600,00 with as little as 30% down and NO mortgage payments? Keep your hard earned cash for your golden years to enjoy a peace of mind, to travel, invest or just spoil your grandkids further. If this sounds too good to be true please read on!
Buy a Home Without Mortgage Payments
In January 2009 the Federal Housing Administration (FHA) created the HECM for Purchase Loan Program. If you are 62 years or older, the Home Equity Conversion Mortgage (HECM) for Purchase Loan can enable you to buy your next home without any monthly mortgage payments.
Regardless of how long you live in the home or what happens to your home’s value, you only make one, initial investment (down payment) towards the purchase.
Your benefits include:
- Eliminating monthly mortgage payments
- Increasing your purchase power
- Preserving your cash
“My wife and I so believe in the merits of the HECM Program that we are presently constructing our new home using this financing vehicle”
Why Consider A HECM For Purchase Loan
No matter what your needs may be a HECM for Purchase Loan can help increase purchasing power and flexibility when buying a principal residence. Many home buyers use the HECM for Purchase Loan to:
- Right-size to a smaller, lower maintenance home
- Buy a home closer to family or friends
- Lower their cost of living during retirement
- Enjoy carefree living in an Active Adult housing community
Best of all, since monthly mortgage payments are not required, a HECM for Purchase Loan may help preserve your hard-earned savings and improve your cash flow. You will continue to own and maintain the title of your home for as long as the property remains your principal residence.
Eligibility Requirements
- All titleholders must be 62 years or older
- Purchased home must be a principal residence occupied within 60 days of loan closing
- Property must be a single family home, 2-4 unit dwelling or an FHA approved condo
- The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of prior residence, home buyer’s other assets or savings
- Borrower must complete a HUD approved counseling session
The amount of money you may receive from a HECM for Purchase Loan depends on the age of the youngest titleholder, current interest rates and fees, and the lesser of the appraised value or the purchase price or the FHA lending limit.
Safeguards for Borrowers
- Mortgage Insurance Premium (MIP) ensures the amount owed on the loan can never be more than the value of the home at time of sale.
- Independent HUD counseling is required prior to loan application
- Lender may only look to the value of the home for repayment; no other assets may be attached if the loan balance grows beyond the mortgaged home value – you are never responsible for any balance due on the mortgage!
Purchasing A Home With A HECM For Purchase Loan Example
Don and Shirley, both 70 years old, want to buy a lower maintenance home. They work with a real estate agent to sell their current residence and also look for a new home that fits their needs. The new home’s purchase price is $300,000. The real estate agent introduces Don and Shirley to a HECM for Purchase Loan Advisor.
The advisor shows the buyers how the HECM for Purchase Loan could provide the funds they need for their new home. Don and Shirley can use proceeds from a HECM for Purchase Loan of approximately $142,000 and they can use cash from the sale of their previous home of approximately $158,000 to purchase a new $300,000 home with no monthly mortgage payments.The down payment can come from any other assets such as investments or CD’s. Don and Shirley’s future obligations are only to pay the property charges such as homeowner’s insurance, real estate taxes and maintenance of the home for the term of the loan.
Many seniors are now becoming aware of this NEW FEDERAL PROGRAM SPECIFICALLY FOR SENIORS. Don’t miss out on this opportunity. See our Sales Consultant for further details.
