When it comes to buying a home we deal with all kinds of buyers, cash buyers, 20% down up to 50% down I have had and there is another way. It is called a HECM and when I start explaining the type of loan I ask people to let me explain before you say no. HECM is a Home Equity Conversion Mortgage, and it might be right for you. There are two requirements borrowers must be 62 years old or older and must meet financial guidelines set by HUD, Department of Housing and Urban Development. The other is the borrowers need to make significant down payment; this is where I want you to keep reading. It is a reverse mortgage and will cover the rest, requiring no monthly mortgage payments.
Terms of the loan after you purchase the home you are required to pay property taxes, insurance, utilities and here in The Villages your amenities fees. You also must maintain the home to FHA standards which most homeowners do anyway. Hopefully you are still reading let me share a few stories. I have worked with clients that have used HECM loans, one wanted to buy a home for cash but turns out they were going to drain savings to do it leaving nothing left for emergencies. Another wanted to move up $50,000 more in a home after seeing options at the lower price.
Let me give you an example, you want to buy a $400,000 home and the youngest borrower is 65, your down payment would be 65.1% or $260,400. If you were saving to pay cash you could buy sooner and never make a mortgage payment again if you want. HECM are interest only loans so you can make monthly payments on the interest if you want preserving the equity in the home.
I’m not a lender but if you would like to discuss the program I would be happy to explain what I know and connect you to an expert.
Dick Betts, REALTOR®
The Betts Team
Touchstone Real Estate
The Villages, Florida
717-860-3107 cell
Dick@DickBetts.com
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