A Home Equity Conversion Mortgage (HECM) is a type of reverse mortgage that can be used to allow a buyer to get into a home with no requirement to repay the loan and no credit requirements!
Reverse mortgages have been around for many years but have always been a tool for a property owner to refinance and take advantage of the equity in their home. Today, another reverse mortgage is on the scene. For a buyer who is aged 62 or more who has some case a HECM may be an excellent option.
This program allows a buyer to purchase far more home than they would otherwise be able without creating a new expense in the form of a mortgage payment. Rather, the buyer pays some cash and takes a reverse mortgage on the home for the balance. The ratio of cash to financing depends on a variety of things but primarily the buyer’s age.
Some of the highlights of the program include:
- No income requirements
- No credit score requirements
- No debt ratios
- No monthly mortgage payment
- Homeowners are responsible for property taxes, insurance, and property maintenance
- Lending up to $450,000 based on age
- Loans values up to 70% based on age
- Minimum age of 62 for all borrowers
In cases with multiple buyers the lowest age is used to set the limits and each of the buyers benefits from the program until death.
A very interesting program for those that are interested. More information is available from your mortgage consultant. Skip Koehler from MetLife Home Mortgage specializes in the program.
