Simple Reverse Purchase Product
The Simple Reverse Purchase Product is a component of HUD's HECM reverse mortgage program, enabling homebuyers aged 62+ to purchase a new home without monthly payments. Real-life examples illustrate how borrowers can benefit from using a reverse mortgage to preserve cash while buying a new home.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
{Insert company logo here} Simple Reverse Purchase Product Presented by: {Name} Phone: {Phone} {Email}
Overview: What is the Reverse for Purchase Product Reverse for Purchase Real Life Examples How does the Reverse for Purchase Work Benefits of Reverse for Purchase for Realtors Benefits of Reverse for Purchase for Borrowers Who is a Candidate
What is the Reverse Purchase Product? The SimpleReverse Purchase Product is the home purchase component of HUD s HECM reverse mortgage loan program The HECM (Home Equity Conversion Mortgage) aka Reverse Mortgage is a government insured loan (FHA) for homebuyer s that are 62+ The Reverse for Purchase program allows borrowers age 62+ to PURCHASE their next/new home; rather than waiting to buy, paying all cash or using a traditional mortgage The Reverse for Purchase program is a payment optional loan! No required monthly principal & interest payment during the life of the loan as long as loan program requirements are met* *Must continue to pay taxes, insurance & live in the home as primary residence!
Reverse for Purchase Real Life Example: Bob & Kelly, both age 70, are looking to move closer to their grandkids in a single story home with less upkeep. They will be selling the large home they raised their family in and will net $300,000 from the sale Retired and on fixed income, they don t want a new mortgage, so they are looking to pay all cash for a $300,000 home or less Their options: Find a Home for $300,000 or less: Pay All Cash Use a Reverse Mortgage to preserve some cash Can t find a home for $300,000 or less Take out a traditional mortgage with a regular monthly payment Use a reverse mortgage to increase purchasing power to buy a new home
Reverse for Purchase Real Life Example: Find a home they like for $300,000: Option 1: Use all of the $300,000 from the sale of previous home Option 2: Preserve Some Cash with a Reverse for Purchase: Combine $115,000 from a reverse mortgage with $185,000 cash from the sale of home Benefit to borrower: Still purchase the home with NO mortgage payment, just pay taxes and insurance BUT NOW, have $115,000 cash in the bank to use in retirement *Used the reverse mortgage to Preserve Cash of $115,000 for use in retirement AND still bought the home with NO required monthly mortgage payment
Reverse for Purchase Real Life Example: Can t find a home they like for $300,000: Option 1: Purchase a home they don t really want or like (settle for something less!) Option 2: Apply for a traditional loan and take on a new monthly mortgage payment (not what they want to do in retirement!) Option 3: Use a Reverse Mortgage to increase their Purchasing Power Combine $200,000 from a reverse mortgage with $300,000 cash from the sale of home to purchase a home up to $500,000 in value Benefit to borrower: Still purchase the home with NO mortgage payment, just pay taxes and insurance (like you always would) BUT NOW, use the reverse mortgage to increase their purchasing power and buy MORE HOME than they could afford with just cash! *Used the reverse mortgage to INCREASE PURCHASING POWER and BUY MORE HOME than they could afford with just their cash AND still have NO required monthly mortgage payment
How does the Reverse for Purchase work? All borrowers must be age 62 or older Reverse mortgage is just a loan! Borrower has full ownership of the property (borrower stays on deed). Reverse mortgage is a 1st lien loan Benefit amount based on Age, Home Value & Current Interest Rates No minimum credit score, but must have sufficient income to pay Taxes & Insurance Must pay Property Taxes, Homeowners Insurance & Maintain the Home Loan becomes due and payable upon maturity event: Sale of the Home, Last Borrower Passes Away or Last Borrower Permanently Leaves the Home (12 consecutive months of non- residence) There are protections for under age 62 spouses (Non-Borrowing Spouses) All Borrowers are required to go through mandatory FHA Counseling Session Reverse mortgage is a Non-Recourse loan (house is only asset that can be used to pay off debt)!
How does the Reverse for Purchase work, cont ? Eligibility & Underwriting Questions: This is an FHA loan Property Types: SFR, Multi-Unit (2-4 units), Townhome, FHA Condo Gift Funds can be used for the downpayment NO minimum credit score or income requirements Credit is reviewed for willingness to repay & income must pass residual income requirements Tax & Insurance escrows not required, but may be mandated based on credit Homes can be purchased using a Trust Standard FHA Purchase Contract required (FHA Amendatory Clause & Real Estate Cert) Seller/Builder Concessions ARE permitted up to 6% of the sales price
Benefits of Reverse for Purchase for Realtors? Increased listings: by showing seniors how and why they can/should sell their house AND down-size or right- size now More Sales: more listings means more sales, one for the house listed and one for the next house being purchased Leveraged buying power: 50% or less down equals higher purchase prices than 100% down option. Increased Listings, More Sales, & Leveraged buying power!!! = BOOM!!
Benefits of Reverse for Purchase for the borrower? No minimum credit score requirement & minimal income requirements Payment optional loan meaning NO required Property & Insurance mortgage payments for the duration of their time in the property. Only requirement is to live in the home as a primary residence and maintain the payment of property taxes and homeowner s insurance. Liquidity: Extra cash reserves still in the bank for when life happens
Whos a candidate? Homebuyers, age 62+ that are looking to: Right-size to a smaller home or lower maintenance home Buy a home closer to family or friends Lower their cost of living in retirement by eliminating monthly mortgage payments Enjoy care-free living in a 55+ senior housing community
Who to call? {name} {NMLS #} {title} {company name} Phone: {phone} Email: {email} {Insert company logo here} {any required disclosure info}
