Reverse for purchase – Reverse Mortgage Massachusetts

BUY THE HOME YOU REALLY WANT IN RETIREMENT

REVERSE MORTGAGE FOR PURCHASE LOAN (H4P)

The Homebuying Loan Made for Fixed Incomes

Many retirees would love to move, but think they either would have to downsize, drain their savings or start a new mortgage. The Home Equity Conversion Mortgage (HECM) for Purchase loan (H4P) can boost your homebuying power while protecting your retirement assets. Let Dan and the Fairway Reverse Team show you how it works.

How the H4P Works

DOWN PAYMENT

The product allows you to combine a down payment from your own funds (e.g., proceeds from the sale of your current home) with the proceeds from the HECM for Purchase (H4P) loan to complete the purchase. The amount that you would be required to put down is roughly 40%-60% percent of the sales price of the home you are buying. The required down payment is determined by the age of the youngest borrower the current interest rates, and the purchase price of the new home.

REPAYMENT FLEXIBILITY

You have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all. The FHA guarantees that as long as you meet your loan obligations (which include maintaining the home and paying for property taxes and homeowners insurance), no repayment of the loan is required until the last borrower moves out or passes away. When the loan becomes due, you or your estate has up to 12 months to repay the loan balance, which is typically achieved by selling the home.

Key Benefits

An H4P Can Potentially Help You To:

Increase your purchasing power to buy the home you really want
Free up cash flow — you will not be obligated to make monthly mortgage payments. You still must maintain the home and pay taxes and homeowners insurance
Extend the life of your productive retirement assets*
Qualify for a mortgage in retirement — there are minimal income and credit requirements

Eligibility

You must be 62 or older
You must meet minimal credit and property requirements
You must receive reverse mortgage counseling from a HUD-approved counseling agency
You must not be delinquent on any federal debt
Home must be a primary residence
Property must be a single-family home, a 2- to 4-unit dwelling or an FHA-approved condo

Increase Your Purchasing Power

With a H4P loan, you sell your existing home. You then take out a reverse mortgage loan on the home you wish to purchase and combine that with the proceeds of your home sale to cover the down payment, along with additional funds if necessary.

Estimated Cash From Borrower*

AGE OF YOUNGEST BORROWER

Faded portion of bar represents the estimated Reverse Mortgage funds.

This information is provided as a guideline and does not reflect the final outcome for any particular homebuyer or property. The actual Reverse Mortgage available funds are based on current interest rates, current charges associated with loan, borrower date of birth (or non-borrowing spouse, if applicable), the property sales price and standard closing cost. Interest rates and loan fees are subject to change without notice. Following the closing of the home purchase, no further principal or interest payments will be required as long as one borrower occupies the home as their primary residence and adheres to all HUD guidelines of loan. Borrower must remain current on property taxes, homeowner’s insurance (and homeowner association dues, if applicable), and home must be maintained.

Upsizing

James and Mary, 62 and 59, want to move to a newly constructed home to retire. They want to keep the same size home they currently have, but home values are more than double in the new community compared to where they live currently. A Realtor® recommended using a reverse mortgage for purchase to buy a house similar to the one that they currently live in.

$600,000
HOME
VALUE

$800,000
HOME
VALUE

JAMES AND MARY COULD SELL THEIR HOUSE FOR $600,000 AND PURCHASE A NEWLY CONSTRUCTED HOME FOR $800,000.

House and story are for illustration purposes only. House may not be available for purchase.

Downsizing

Cindy, 62, is selling her current home that is owned free and clear to move closer to her grandchildren. She would like to downsize when she moves and be able to set up an annuity for her grandchildren to help pay for college.* The community she would like to move to is more expensive than her current one. A reverse mortgage can allow her to purchase a home in the new community and have money left over from the sale of her current house.

$800,000
HOME
VALUE

Cindy could live in her current $400,000 home further away from her grandchildren.

$650,000
HOME
VALUE

Or she could downsize to a $375,000 home for $230,000 down that is closer to her grandchildren.

With a reverse mortgage for purchase, Cindy could sell her current house for $800,000 and buy a $650,000 house. She would have ~$360,000 remaining to use. $170,000 could go to an annuity for her grandkids and $190,000 could be invested by her financial advisor.*

House and story are for illustration purposes only. House may not be available for purchase.

Curious About What You May Qualify For?

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