Purchasing a home with a reverse mortgage

As aging in place becomes more desirable of an option for seniors, so too has the importance of having homes that are properly equipped with the necessary accessibility and needs of older adults. However, some homes, even with modifications may end up being too difficult to handle as a senior. Living alone in a spacious house can be a daunting task to maintain, let alone account for accessibility. Even if the reason is less about accessibility and more the desire to change the environment to be more manageable or comfortable, a purchasing a home with a reverse mortgage Tulsa for purchase may be a potential solution.

 

HECM for Purchase

The HECM for Purchase is founded on the same principles as the HECM reverse mortgage, coupled with all of its benefits of eliminating mortgage payments and being able to leverage the equity of a home. However, the HECM for purchase requires an individual to make a downpayment on a home, usually using the funds from savings or from the sale of an older home. This downpayment is turned into equity, which coupled with the value of the home determines how much an individual will receive from purchasing a home with a reverse mortgage Tulsa.

One of the primary benefits of the HECM for purchase is that it allows an individual to purchase a new home and obtain a reverse mortgage for the new home without having to incur two separate sets of closing costs. Securing a reverse mortgage on a new home comes with all the benefits of one, such as:

  • No mortgage payments
  • House ownership
  • Reduced financial costs
  • Government insured loan
  • Line of credit

With the down payment following the sale of an older home, seniors may be able to move into a home that they ordinarily may not have been able to acquire. Or, they may be able to move into a home that may have had interest rates that were too costly.

For seniors who may have a fixed income meeting monthly mortgage payments can be difficult while trying to fund the cost of other necessary services. A HECM for purchase can be the solution. These benefits along with the loan granted from the reverse mortgage can make financing a new home, or purchasing a home with a reverse mortgage Tulsa services such as home health care, home modifications, or personal needs much more lenient.

 

Considerations regarding HECM’s

Homes that are ineligible for HECM’s are: 

  • cooperative units 
  • boarding houses 
  • bed and breakfast establishments
  • manufactured homes built before June 15, 1976, and 
  • manufactured homes lacking HUD certification labels or a permanent foundation.

HECM’s for purchase have the same obligations as the regular HECM:

  • Property expenses must be paid. This includes property tax, homeowners’ insurance, homeowner’s association fees.
  • Home must remain in a safe, livable condition, repairs must be made as needed and as soon as possible.
  • The owner must move into the home within 60 days and the home must become the new primary residence. 

HECM’s for purchase loans are due when:

  • The borrower passes away and does not have a spouse.
  • If the borrower lives elsewhere for more than 12 consecutive months.
  • If the home is sold.
  • Obligations of maintaining the property, paying property taxes, homeowner’s association fees, basic repairs, and homeowner’s assurance are not maintained.