Reverse Mortgages

Reverse Mortgage for Purchase

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What You Need to Know About HECM for Purchase

Whether you know it or not HECM for Purchase is the best thing to happen to real estate in the past few years.  In the midst of what has arguably been one of the worst real estate markets in history, HECM for Purchase is a bright spot that can increase your listings and sales for years to come.  A large percentage of seniors plan to relocate during retirement.  They will almost always have a home to list and one they wish to purchase.  Can you say dual agency?  

You should take advantage of every opportunity you get to introduce this product to your clients.  Every prospective home buyer who is over 62 needs to know about this option.  And it really is up to you to inform them.

We are here to provide education and support to you so that you don't miss out on any sales due to lack of information.

 Important things to know:

1.  Reverse Mortgage counseling is required prior to opening escrow.  It is important for prospective buyers to make their decision early in the process so there are no unnecessary delays due to this requirement.  All borrowers, non-borrowing spouses, attorneys-in-fact, and trustees must be counseled and must sign the counseling certificate.  Counseling certificates are good for 180 days.

2.  Eligible properties include:  single family residences, 2-4 unit propertied, FHA approved condominiums, some manufactured homes.  Newly constructed homes must have a Certificate of Occupance issued prior to started the reverse mortgage transaction.

3.  Down payment funds must come from allowable sources.  Generally, borrowers own funds and those obtained from sale of borrower's own assets.

4.  Seller Concessions are not allowed.  Neither is down payment assistance.  Seller is only allowed to pay:  transfer tax, owner's title policy, pest inspection fee, settlement fee.

5.  45-60 day escrow is recommended as reverse mortgages have a longer underwriting process.

6.  Closing must take place in the Settlement Agent's office.