About Reverse Mortgages
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Home Equity Conversion Mortgage for Purchase

Prior to January 2009, a Reverse Mortgage was used to convert the equity in your existing home into cash.  By using a Reverse Mortgage to help purchase a property, you can relocate to a home better suited for your aging-in-place needs (perhaps downsize to a single story property) or relocate to areas closer to family members.

If you choose a Home Equity Conversion Mortgage (HECM) for purchase when you downsize, you can eliminate all monthly mortgage expenses.  This may be a great way to reduce retirement expenses and leverage your home equity.  From the sale of your prior home, you can often generate enough money for the larger down-payment as well as the costs of moving.  

The loan programs, interest rates, fees and loan terms and conditions are all identical to those of an equity-redemption Reverse Mortgage.  You never have to make any payments as long as you live in the home.

The HECM for purchase software program establishes the amount of loan proceeds for which you would qualify as though you already owned the home to be purchased.  The loan program then requires that you make a “down payment” from your assets for the difference between the sales price and the funds available through the Reverse Mortgage.  

If proceeds from the sale of your prior home are not adequate, you may tap other assets such as your savings or retirement accounts to make up the difference. While this approach requires a far greater than 20% down payment associated with conventional financing, you will never make another mortgage payment for your home.