Today’s senior homebuyers now have access to a powerful traditional mortgage alternative when considering the purchase of a new primary residence. Imagine purchasing a new home and no monthly payment is required!
The safe, secure government-insured Home Equity Conversion Mortgage (HECM) for Purchase, aka H4P, program allows for use of the loan proceeds and their downpayment to purchase the perfect new home they have been thinking about—in one single transaction!
The H4P Program also represents a significant talking point to your network of real estate agents and just the needed financing program resource which can help close more purchase transactions.
Whether homebuyers are downsizing or upsizing, moving closer to family, changing climates, or the present home no longer meets their needs, the H4P Program provides a wide range of features and benefits including:
►Available for senior homebuyers age 62 and older
►No monthly mortgage payments required
►Homeowner(s) remain solely on title
►Minimal income and credit requirements
►Existing single family, to- to four-unit, PUDs, and condominiums approved by FHA are all eligible property types
►Adjustable- and fixed-rate options are available
New construction homes may also be eligible for the H4P Program, subject to completion, inspection, issuance of occupancy certificate and HUD guidelines. Mastering this H4P option also allows for increasing your reference network to include homebuilders.
The H4P program has the same terms and conditions as the traditional HECM refinance and streamlined programs. The loan balance and accrued interest will become due and payable upon a maturity or default event such as no longer living in the property as the primary residence, failing to pay, hazard and flood insurance (if applicable), property taxes and assessments or failing to maintain the property.
For years, reverse mortgage loans have allowed senior homeowners to convert part of the equity in their homes into cash, without having to sell their homes or take on additional monthly debt payments.
The opportunity to offer this powerful product starts with a company wholesale/(TPO) or correspondent relationship. The key to successful origination begins with knowledge of HECM basics; including program features and benefits, program HUD guidelines, and the ability to interpret loan scenario options generated by proprietary software offered by lenders to potential borrowers and their trusted advisors.
Today’s new reverse mortgage loans in general have become increasingly popular as a financial longevity and retirement planning tool, but good information is hard to find.
Reverse Mortgage Solutions Inc. (RMS) offers complete training and support to new market origination participants. Assisted by a team of dedicated HECM professionals, our scalable partnering opportunities will provide you with the resources to deliver the “right fit” reverse mortgage product to your borrower(s).
Ralph Rosynek is senior vice president and director of marketing and communications for Reverse Mortgage Solutions Inc. (RMS) and a seasoned HECM Direct Endorsement Underwriter. For additional information, he can be reached at [email protected]
or call (281) 404-7970.
This article originally appeared in the May 2014 edition of National Mortgage Professional Magazine.