Realtor infomation
Realtors – Sell more houses with a Reverse Mortgage for purchase! First of all - what is a HECM For Purchase? HECM stands for Home Equity Conversion Mortgage (HUD loves acronyms!) FHA defines “HECM for Purchase” as a R.E. purchase where title to the property is transferred to the senior buyer, which the buyer will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property. Whew!
Here are some of the benefits of using an FHA Reverse (HECM) Mortgage for purchase:
•Easier Qualifying – Your clients will not have to “qualify” for monthly payments on the new purchase transaction. A significant detail to senior buyers on a fixed income. * Certain transactions will require some “qualification” – ask your Reverse Mortgage professional for specific details.
•More Purchasing Power – Gives clients who are downsizing more purchasing power than if they had to pay all cash allowing them to buy a better quality home, in a nicer neighborhood - giving them, you and their families peace of mind about their dream retirement home.
•Simplified Transaction – Back in the day, your senior buyers would have to purchase the home with cash or traditional financing and then afterward, refinance into a reverse as a separate transaction. Now it can all be handled in one transaction.
How does this product benefit your real estate business? A reverse for purchase is a niche product, but your expertise and know how can benefit you in 2 major ways.
Income – Higher Commissions and Double Commission
•By allowing you to list a seniors current home for sale and showing them how they can afford to buy a home or condo instead of renting, you will set yourself apart from other agents & brokers – and earn a commission on both properties!
•By allowing you to show a client higher value homes you stand to earn a higher commission in dollars
•Goodwill + Expertise = Client Referrals. As a professional Realtor you already know how putting your clients’ best interests first generates trust and rapport, setting the stage for happy clients who will “sell you” to their friends and family. The specialized knowledge of using a HECM for purchase places you at the top of your game. Clients expect you to know about all things “Real Estate” - exceeding client expectations is one more key to generating new client referrals
How Does it Work?
•The FHA Maximum Lending Limit for Reverse Mortgages is $625,500
• Down Payment (LTV) varies Depending upon age• Down Payment varies based upon current Expected Rate
• Your Reverse Mortgage consultant will utilize a special HECM Calculator to help you to determine the amount of funds your buyer will need to bring in. Conversely, if you know your available funds for a down payment, your consultant can estimate the maximum purchase price for your buyer. This will allow you to select appropriate properties to show your clients.
• Down Payment (LTV) varies Depending upon age• Down Payment varies based upon current Expected Rate
•– In order to ensure the smooth processing and closing of this type of transaction, it is recommended that the selected Title and Settlement Agency’s have prior Reverse Mortgage closing experience. Closing delays can result from inexperienced vendors.
Example age 70 buyer purchasing a $200,000 home would only need $78,000! The HECM purchase would provide $118,000.
