How does a Reverse Mortgage purchase work? It can be a perfect time to move closer to family or relocate.

What is a Reverse Mortgage purchase?

Realtors: To qualify for an FHA HECM, one must be 62 years of age or older, occupy the property as your principal residence, not be delinquent on any federal debt, and participate in a consumer information session given by an approved HECM counselor.  At closing, HECM borrowers must make a down payment, which will be applied to satisfy the difference between the HECM principal limit and the sale price for the property, plus any HECM loan-related fees that are not financed into the loan, minus the amount of the earnest deposit.

Sample Reverse Mortgage Purchase Transaction for a buyer born in 1949:

Purchase Price                                                       $500,000.00

Available Principal Limit                                      $211000

Cash Required at Closing                                    $288000 includes all closing costs, which can be split

PLEASE CALL TO CHECK RATES FIRST, THEY CHANGE EACH TUESDAY.

They are very strict about where this down payment comes from.  It can be from such things as verified savings, retirement funds, and proceeds from the sale of real estate, but it may not be from any of the following:

FHA prohibits seller contributions (also known as "seller concessions"), the use of loan discount points, interest rate buy-downs, closing cost down payment assistance, builder incentives, gifts, or personal property given by the seller or any other party involved in the transaction.  This includes customary charges that are normally paid on behalf of the borrower by the seller.

Subordinate liens. Bridge loans. Gap financing. Cash withdrawals from credit cards. Personal loans. Seller financing. Gift funds

For seniors, buying a home is a HUGE move when done correctly.  It involves careful coordination between financial planners, a CPA, a good Realtor, and a good loan officer.  Consideration as to whether a reverse mortgage purchase should be involved or shouldn't be involved should always be evaluated as an option.

Please give Scott Underwood a call if relocating to the south or relocating in-state. I have been in the Reverse Mortgage business since 2007. I can be reached at (205) 908-2993 or Scott@reversemortgagealabama.com. I'm also a broker for the big lenders, but I have low overhead, and they take months to close; I close in under a month to keep your Realtor happy. Have your realtor call and ask gather information from me about how much down payment for reverse mortgage purchase, what homes qualify for reverse mortgage purchase, reverse mortgage purchase pros and cons.