Aging in Style: Home Equity Conversion Mortgage (HECM) for Purchase
Susan A. Pomfret - USA Mortgage
For more information about the author, click to view their website: USA Mortgage
Mar 26, 2024
Florida - Southwest
A HECM for
Purchase allows those 62 and older to purchase a primary residence, there is
also a Reverse Mortgage for Purchase product for those 55* and older (*in most
states).
Borrowers are
realizing the benefits of using a HECM for Purchase and how they can improve
their retirement and live a more financially stress-free retirement.
Home Equity Conversion Mortgage (HECM): What is it?
- A loan for homeowners 62+.
- Must apply to the borrower’s
primary residence.
- Proceeds available determined by
age of the youngest borrower, expected interest rate, and property value
(2024 HUD national lending limit: $1,149,825).
- Must be SFR, 2-4 unit, townhome,
or an FHA-approved condo or manufactured home.
- Borrower is responsible for
paying property taxes, insurance, and any other property charges, as well
as upkeep of the property.
- Loan becomes due when borrower
sells, no longer maintains the home as a primary residence, or the last
remaining borrower passes.
- Reverse Mortgage Jumbo products
are available for higher home values (loan amounts up to $4 million) for
homeowners 55* and older.
Borrower safeguards
- Independent HUD counseling is
required prior to loan application.
- Financial assessment is required
for loan approval (no FICO score or DTI requirements).
- Life Expectancy Set-Aside (LESA).
- Capped interest rates.
- Full disclosure of costs.
Example
Mary (age 75)
wants to move and “right size” to a home that is better suited for her.
She currently
pays roughly $1500/mo. for her current mortgage.
She figures
she will net about $375,000 from the sale of the current property and ideally
would like to purchase a home outright so she can eliminate the burden of a
mortgage payment.
Problem! Mary’s forever dream home that she has fallen in love with
is $500,000. So, her real estate agent introduces her to the option of a HECM
for Purchase loan.
Mary’s
HECM for Purchase option:
Purchase
price of forever dream home: $500,000.
Proceeds from
sale: $375,000.
HECM for
Purchase down payment: $216,966 (assuming buyer is paying all
fees).
Remaining
proceeds from sale: $158,034.
Realized
funds without HECM for Purchase: $0.
Realized
funds with HECM for Purchase: $158,034.
*For
illustration purposes only.
- 12,000 people that turn 65 each
day*
- 34% of all homeowners are over 60
years old**
Is a HECM right
for you? Contact me today to learn more at [email protected] or 401-595-7300.
Sources:
*https://www.cnbc.com/2017/10/03/health-care-dilemma-10000-boomers-retiring-each-day.html
** https://www.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf
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Local Services By This Author
Susan A. Pomfret RICP, USA Mortgage
Reverse MortgagesAt USA Mortgage, we are passionate about helping seniors achieve financial flexibility through Home Equity Conversion Mortgages (HECMs) and other Reverse Mortgage solutions. With a customer-focused approach and over two decades of experience, we provide tailored mortgage options designed to meet the needs of homeowners aged 55 and older.Our dedicated local Team are experts in HECMs/Reverse Mortgages, guiding you every step of the way with a seamless loan process. Whether youre looking to access your homes equity, refinance, or explore a HECM or Reverse for Purchase option, USA Mortgage offers a wide range of solutions to help you reach your financial goals.We pride ourselves on delivering a reliable, detail-oriented, and personalized experience. From the initial consultation toloan closing, our Team is committed to finding the right product that works for you, providing peace of mind and financial freedom. Trust USA Mortgage to be your premier home loan partner, empowering you to make the most of your retirement years.We offer a wide range of mortgage options to suit your specific needs and financial goals. From conventional loans to FHA, VA, and USDA loans, HECM and Reverse Mortgage loans. USA Mortgage has the expertise to help you find the perfect mortgage solution. Susan A. Pomfret, RICP has a career spanning several decades, she is proud to be one of the trailblazers in the reverse mortgage industry, having the honor of originating one of the first HECMs in Rhode Island in 1989 and has since dedicated her career to advancing the industry, playing a pivotal role in elevating companies to new heights. Under her leadership, she has transformed HECM closings, overseen vast teams, and engineered sales strategies nationwide.Susan's passion extends beyond just professional accomplishments; she is deeply committed to the senior community. This is reflected not only in leadership roles within senior-focused non-profit organizations but also in the dedication as a volunteer and advocate. She has been published in numerous mortgage publications, covered esteemed events like the White House Conference on Aging in 2005 and 2015, and was chosen to assist in writing the first Certified Reverse Mortgage Professional (CRMP) exam for the industry's trade organization, the National Reverse Mortgage Lenders Association (NRMLA).In addition to Susan professional endeavors, she holds a Bachelor Degree in Paralegal Studies, a Certificate in Gerontology from Roger Williams University and the Retirement Income Certified Professional Designation from The American College of Finance Services. Susan is driven by the mission to enrich the lives of our senior population and empower retirees to live a financially stress-free retirement.Contact Susan Pomfret, RICP at 401-595-7300 to schedule your free consultation.NMLS#1253876. Licensed in FL (License #LO125044)