HECM for Purchase
While Home Equity Conversion Mortgages (HECM’s) are used most often to refinance a home, they are also a great tool for retirees buying a home.
The home must be the primary residence, and all the owners must be at least 62 years old. Depending on the age of the youngest borrower and the programs available, the buyer makes a down payment on the home of approximately 60% of its value. The remaining amount is financed with the HECM.
Example: Home price $300,000 Down Payment $180,000 HECM $120,000
Why purchase with a HECM? They require no monthly mortgage payments. The buyer is able to purchase more home with less cash.
Note: Sellers’ concessions are not allowed. The value of the home for purposes of HECM financing is the lesser of the purchase price or the appraised value.