Builders: Here’s a smart home financing option that can help you sell more homes and upgrades

Let me show you how our Home Equity Conversion Mortgage (HECM) for Purchase home financing program can help you sell more homes, by making it easier for people age 62 and older to buy the home they desire.

  • It can help you attract and capture a brand new — and rapidly growing — market of home buyers. Did you know that 22% of today’s home buyers are age 62 and older, according to a recent study by the National Association of Realtors®, and that number is expected to grow over the next decade?
  • More shoppers can become buyers, because it allows them to keep more of their cash than they could with a conventional mortgage or an all-cash purchase.
  • Buyers can get additional spending power for upgrades or to purchase a higher-end home (e.g., pick premium lot, more square footage, etc.)

How it works: Buyers can purchase a home by combining a one-time investment of their own funds (a down payment of typically about 45% to 62%, depending on borrower age) with loan proceeds from a HECM. This down payment range assumes closing costs will be financed into the loan.

As with a traditional “forward” mortgage, the home they purchase secures the loan. But unlike a traditional mortgage, monthly mortgage payments are optional while they own and live in the home as their primary residence — making buying a new home even more attractive.

As with any home-secured loan, the borrower must meet their loan obligations, keeping current with property taxes, insurance, maintenance, and any homeowners association fees.

Comparing three ways to purchase a new home:

 
1
ALL CASH
2
TRADITIONAL MORTGAGE
3
HECM for Purchase
Why?
  • You own the home free and clear
  • Option to make a minimum down payment and limit upfront investment
  • Builds equity as you pay down the loan
  • No monthly payments of principal and interest *
  • Gives you the flexibility to get the home you really want
  • Allows you to keep more assets to use as you wish
Why
Not?
  • Ties up a large portion of your money
  • Monthly mortgage payments diminish your cash flow
  • Your equity in the home decreases as the loan balance increases over time due to interest.
  • When the loan comes due, you or your heirs must pay off the loan to keep the home.
* Borrower is responsible for property taxes, homeowners insurance, and property maintenance in order for the loan to remain in good standing. A HECM is a home-secured loan that must be repaid upon default or a maturity event, such as when the home is sold, all homeowners have passed away, or the last surviving borrower no longer lives there as their primary residence.

Call me today and see why HECMs are a loan for life.

Wendy Fitzgerald
HECM Loan Specialist, NMLS #455401
Call 757-481-1616

L1467-Exp112018
Learn more about this unique home financing solution and how it can impact your business.

 

I welcome your questions.
Feel free to call 757-481-1616, or send me your questions by email using the form below.

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