Mar 13, 2017
If you are close to retirement age and have been looking into downsizing your home or various refinance options to increase financial stability, you may have come across something called a HECM loan. So, exactly what is a HECM loan?
The HECM (Home Equity Conversion Mortgage) for Purchase loan option is for homebuyers who are age 62 or older. HECM is a type of Reverse Mortgage that allows the homebuyer to purchase their dream home without making any monthly payments. Depending on the buyer’s age, they will need to provide a down payment of anywhere from 35-50% of the purchase price and never make another mortgage payment for as long as they live in the home. There is also a refinancing option for those who wish to use the HECM loan program but want to stay in their current home.
Some advantages of a HECM loan over a traditional 30 year mortgage or paying cash are:
What are the qualifications for a HECM loan?
What types of homes are eligible for the HECM for Purchase program?
What are the homeowner responsibilities?
There are only a few items you will need to take care of once you move into your new home after closing. These include:
Other advantages of the HECM for Purchase program include:
Each person’s financial and life situations are different so it’s a good idea to investigate all your options before choosing your next mortgage. If you are interested in learning more about the HECM for Purchase program, ask your lender if they offer HECM loans and have them go over the advantages and disadvantages of HECM versus other types of mortgages with you.
If you are interested in using the HECM for Purchase program to purchase a McKee home, please contact us at 910-672-7296 for more information or to set up an appointment to go over the program, answer any question you may have and find out what you can expect during the entire loan process.
If you are thinking about down-sizing and looking for a single-story or ranch-style home for ‘aging in place’, please visit our single story homesweb page for floor plan and neighborhood information.