For Purchase H O M E E Q U I T Y C O N V E R S I O N M O RT G A G E ( H E C M )

More commonly known as a reverse mortgage

for purchase, a HECM for purchase allows you

to purchase a new home with a reverse

mortgage and not have to make a mortgage

payment for as long as you live in the home.

You are still responsible for paying property

taxes, homeowners insurance, and

maintenance costs for the new home.

What is a HECM for Purchase?

• No monthly mortgage payments are required. You still pay property

taxes, homeowners insurance, and home maintenance costs.

• It is a government-insured loan.

• It is a non-recourse loan, meaning you will never owe more than the

home is worth.

• The amount you are eligible for is determined by the purchase

price, appraised value, or FHA mortgage limit (whichever is less),

the youngest borrower’s age, and the interest rate.

• You are the owner of your new home.

• You can sell the home or pay the loan off with no prepayment

penalty.

What is a HECM for Purchase?

THE HECM FOR PURCHASE IS SIMILAR TO A TRADITIONAL MORTGAGE

THE HECM ALSO HAS ADDITIONAL BENEFITS

How Do You Qualify?

• You must be 62 or older.

• You create the necessary equity in your

home with a substantial down payment.

• You must uphold the financial

responsibilities of the loan, including

paying your property taxes and

homeowners insurance and maintaining

your home. You will undergo a financial

assessment to ensure you are willing and

able to do this.

QUALIFICATIONS

How Does

• The lesser of the appraised

value of the home, the

purchase price of the home,

or the mortgage limit set by

the FHA.

• The age of the youngest

borrower. The older the age,

the less amount required to

put down.

• Current interest rates Work?

T H E H E C M F O R P U R C H A S E

THE AMOUNT YOUR QUALIFY

FOR IS BASED ON

When Does the Loan Come Due?

• The last borrower moves out or sells the

home.

• The last borrower passes away.

• The borrower fails to pay their property taxes,

homeowners insurance, or does not maintain

the property.

The loan is repaid by selling the home or heirs

purchasing the home for 95% of the appraised

value or what is owed on the loan, whichever is

less. The amount due will never be more than the

value of the home.

THE LOAN COMES DUE WHEN

George and Linda are both 68 and currently living in

Michigan. They recently retired and decided to move

to Florida to enjoy the warmer weather and spend

more time with their grandchildren who live there.

They sold their home for $200,000 and purchased a

new home for $300,000. They use part of the

proceeds from the sale of their old home to make a

down payment of $156,000 on the new home. They

use a reverse mortgage to pay for the rest and save

the remaining $44,000 from the sale of their old

home to put towards their retirement.

MOVE CLOSER TO FAMILY OR WARMER CLIMATES

Scenario

Ron and June are 73 and live in a two-story home.

Ron suffers from severe arthritis in the knees that

makes it difficult to climb the stairs each day, and

June’s bad back prevents her from maintaining the

home that has become too big for them. They sell

their home for $500,000 and decide to downsize to a

newly constructed one-story home. Since the home is

new, they are able to add walk in tubs, grab bars,

and other safety features. They purchase the brand-

new, customized home for $350,000. They only use

$180,000 from the sale of their old home and pay the

rest of the amount owed with a $170,000 reverse

mortgage for purchase. They save the $320,000

remaining from the sale of their old home for any

unexpected expenses.

MOVE INTO A HOME THAT MEETS PHYSICAL NEEDS

Scenario

What is the

Process for

Getting a

HECM?

• Have your questions answered and see if

you qualify.

• If you haven’t found your dream home yet,

your specialist can answer your questions

along the way and give you helpful tools to

finding your new home.

• If and when you find your new home, you

must obtain a purchase agreement before

moving on to the next step.

• Attend a required counseling session with

a HUD-approved counselor.

STEP 1 INITIAL CONSULTATION

• Receive and review your application.

• Undergo a financial assessment to ensure

you can uphold the financial

responsibilities of the loan.

• An independent, FHA-approved appraiser

will appraise your home.

• Application documents are reviewed and

finalized.

STEP 2 APPLICATION & REVIEW

• Sign the final documents and close your

loan.

• Pay for your new home with your down

payment and reverse proceeds.

• Start enjoying your HECM!

STEP 3 CLOSING & DISBURSEMENT

Do You Have More

Questions? ANSWERS TO OUR MOST FREQUENTLY ASKED

QUESTIONS

A: When you purchase a home using a reverse

mortgage, the down payment is based on

three things: the age of the youngest

borrower or eligible non-borrowing spouse,

the interest rate of your loan, and the lesser

of the appraised value of the home, the

purchase price of the home, or the mortgage

limit set by the FHA. Remember, the older

you are, the lower the down payment will be

on your new home.

Q: HOW MUCH DO I NEED FOR A DOWN PAYMENT?

A: There is no credit score requirement to get

a reverse for purchase. Throughout the loan

process, we review your credit history to

determine if there are additional

requirements.

Q: DO I NEED A GOOD CREDIT SCORE TO BUY

A HOME WITH A REVERSE MORTGAGE?

A: Financial assessment is a requirement from

the government and shows the lender that

the client is willing and able to uphold the

financial obligations of the loan.

Q: WHY ARE YOU CHECKING CREDIT HISTORY?

A: Heirs can sell the home to pay off the loan

and keep any remaining money from the sale.

They can buy the home for 95% of the

appraised value or what is owed on the loan,

whichever is less. Or, they can sign the deed

over to the lender and walk away.

Q: WILL HEIRS BE LEFT PAYING FOR THE LOAN IF

THE BORROWER PASSES AWAY?

A: There are some properties that do not

qualify for a reverse mortgage for purchase.

Make sure to ask your specialist.

Some of the properties that do not qualify

are:

• Second homes

• Cooperatives

• Manufactured homes

• Properties with more than 50 acres

Q: WHAT TYPES OF HOMES WILL NOT QUALIFY

FOR A REVERSE MORTGAGE FOR PURCHASE?

A: Yes, but remember, the Certificate of

Occupancy must be provided before final

underwriting approval for closing.

Q: CAN I PURCHASE A NEWLY CONSTRUCTED

HOME WITH A REVERSE FOR PURCHASE?

John Doe

Name

(XXX) XXX-XXXX

Phone Number

Are You Ready to Change the Way You Live Your Retirement?

email@service.com

Email

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NMLS Number

This information is not intended as an advertisement as defined in Regulation Z, Section 1026.2. North Shore Capital Inc is not part of or associated with HUD, FHA, or the Federal Government. Rates, terms, and programs subject to change without notice. Additional terms and conditions may apply. © North Shore Capital Inc, NMLS #347784