PURCHASE A HOME WITH A REVERSE MORTGAGE

The Home Equity Conversion Mortgage (HECM) for Purchase Loan is an innovative program that helps seniors use the equity from the sale of their previous home to fund the purchase of their next home.

HELP YOUR CLIENTright size to a dream house

HECM FOR PURCHASE EXAMPLE*

Home Purchase Price $300,000

Available Loan Amount $198,900

Total Net Settlement Costs $9,563

Available Loan Proceeds $189,337

Cash Required to Close $110,663

*See reverse for details and restrictions

CURRENTLY UNAVAILABLE IN TEXAS - For professional realtor use only. Not intended for distribution to the public.

NMLS# 9392 (www.nmlsconsumeraccess.org). American Advisors Group (AAG) is headquartered at 3800 W. Chapman Ave., 3rd & 7th Floors, Orange CA, 92868. AAG conducts business in the following states: AK (Alaska Mortgage Broker/Lender License No. AK9392), AL, AR, AZ (MB_0911141), CA (Loans will be arranged pursuant to Department of Business Oversight California Finance Lenders License (603F324) and Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act (4131144)), CO (to check the license status of your mortgage loan originator, visit http://www.dora.state.co.us/real-estate/index.htm) CT, DC (District of Columbia Mortgage Dual Authority License No. MLB9392), DE, FL, GA (residential Mortgage Licensee #22849), IA, ID, IL (Illinois Residential Mortgage Licensee), IN, KS (Kansas Licensed Mortgage Company MC. 0025024), KY, LA MD, ME (SCM11356), MI, MN, MO, MS (Licensed by the Mississippi Department of Banking and Consumer Finance), NC, ND, NE, NJ (Licensed by the N.J. Department of Banking and Insurance), NM, NV, NY (Registered Mortgage Broker – NYS Banking Department), OH, OK, OR (ML-4623), PA (Licensed by the Pennsylvania Department of Banking 28356), RI (Rhode Island Licensed Lender) SD, SC, TN, TX (Mortgage Banker Registration), UT, VA (Licensed by the Virginia State Corporation Commission MC – 5134), VT (Vermont Lender License No. 6384), WA (Consumer Loan # CL-9392),WV, WI, WY (WY-DBA AAG Reverse Mortgage Lender/Broker License No. 2331). We arrange loans with third-party providers but do not make mortgage loans in New York. Fred Thompson is a paid AAG spokesperson. AAG also works with other lenders and financial institutions that offer reverse mortgages.

DISCOVER A HECM FOR PURCHASE LOAN

The HECM for Purchase Loan is a Federal Housing Administration (FHA) insured home loan that allows seniors 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 live in the home or what happens to their home’s value, they only make one, initial investment (down payment) towards the purchase.

ACTIVE STRATEGIES

a Mortgage Insurance Premium (MIP) ensures the amount owed on the loan can never be more than the value of the home at time of sale

a Independent HUD counseling is required prior to loan application

a Lender may only look to the value of the home for repayment; no other assets may be attached if the loan balance grows beyond the mortgaged home value (non-recourse loan)

ELIGIBILITY

The amount of money an individual may receive from a HECM for Purchase Loan depends on the age of the

youngest title holder, current interest rates, and the lesser of the appraised value, the purchase price or the FHA

lending limit.

a Youngest titleholder must be 62 years or older

a Purchased home must be a primary residence, occupied within 60 days of loan closing

a Property must be a single-family home, 2-4 unit dwelling, or a FHA approved condominium

a The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of prior residence, home buyer’s other assets or savings

a Borrower must complete a HUD approved counseling session

FOR THE CLIENT

a Easy to qualify

a No monthly mortgage payments1

a Less up front investment than a cash purchase

FOR THE REALTOR

a Sell more homes

a Improve purchasing power

a Convert renters to buyers

1The borrower must live in the home as their primary residence, continue to pay required property taxes, homeowner’s insurance and maintain the home according to Federal Housing Administration requirements. Interest will accrue on the loan balance.

The Details Of The Example*This example is based on the youngest borrower, who is 70 years old, a variable rate HECM for Purchase loan with an initial interest rate of 2.953% (which consists of a LIBOR index rate of 0.203% and a margin of 2.750%). It is based on a purchase price of $300,000, origination charges of $1,500, a mortgage insurance premium of $6,000, other settlement costs of $2,063; amortized over 180 months, with total finance charges of $182,346.50 and an annual percentage rate of 4.48%. Interest rates may vary.