Page 3 - B2BAAG14_Builders Presentation

What is a HECM for Purchase?

Designed for adults age 62 years or older, the Home Equity Conversion Mortgage
(HECM) for Purchase Loan can help your clients buy their next home without monthly
mortgage payments.* The HECM for Purchase is an FHA-insured home loan that allows
older adults to use the equity from the sale of a previous residence to buy their next
primary home in one transaction. Regardless of how long they’ve lived in the home
or what happens to the home’s value, they only make one, initial investment (down
payment) towards the purchase. The loan becomes due when the last borrower, or
eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out,
defaults on taxes or insurance payments, or does not comply with the loan terms.
“Not only did working
with American Advisors
Group to obtain a
Within the same transaction, borrowers can: HECM for Purchase
make it possible for
3Purchase a new principal residence 3Obtain a reverse mortgage loan us to retire 10 years
sooner than we thought
we could, it allowed
us to take advantage
How does your buyer benefit? of a strong real estate
market to obtain our
3 Buy a new home with no monthly 3 Increases purchasing power home.”
mortgage payments*
3 Seniors can move into a more suitable Andy and Beatrice H.,
3 Contributes toward the down home in their golden years Florida
payment on a home purchase - pay
less upfront than a cash purchase 3 Enjoy carefree living in a senior
housing community
3 Lower cost of living during retirement
by eliminating monthly mortgage
payments*

Example One Two Three
HECM for Purchase a New +$176,276 $273,724 at your
Purchase Loan Home Down Payment client’s disposal

Your client finds a NEW +$123,724 and no monthly
mortgage
home for $300,000. payments.*
HECM to Complete
Use $176,276 as a down Purchase
payment. *Borrower must
Your client, a continue to pay property
homeowner age 65, Use $123,724 from a taxes, homeowner’s
sells their existing HECM for Purchase loan insurance, and home
home for $450,000. to complete new home $300,000 maintenance costs.
purchase.

This example is based on the youngest borrower age 65, Annual Percentage Rate of 5.709%, home purchase price of $300,000, IMIP of $6,000, origination fee of
$5,000, and other settlement costs of $2,976. HECM fixed as of 06/20/2018.

*If the borrower qualifies and the loan is approved, a reverse mortgage must pay off existing mortgage(s).
With a reverse mortgage, no monthly mortgage payment is required. Borrower must continue to pay for property
taxes, homeowner’s insurance and home maintenance.

B2BAAG14