You could use the money from the sale of your home to pay all cash for the new one; after paying realtor fees and taxes, this would leave you with about $40,000 and no monthly mortgage payment.
However, by using an HECM for Purchase loan instead, you could buy the new home with only $165,737 of your own funds — keeping $144,263 more than if you paid cash, and still having no monthly mortgage payment. (As with any mortgage, you would still be responsible for paying property-related taxes, insurance and upkeep in order for the loan to remain in good standing.) This could make it easier for you to afford options or upgrades you want or need. Then you could take the remaining funds and invest them in your retirement.
This example is for illustrative purposes only. Closing costs may include an origination fee, third-party closing costs, and an FHA Mortgage Insurance Premium. Interest rates and funds available may change daily without notice. Please contact us for details of credit costs and terms.
WHAT KIND OF HOME CAN YOU BUY?
Single-family homes, townhomes, and FHA-approved condominiums are eligible as long as you use the home as a primary residence.
WHAT DO YOU NEED IN ORDER TO QUALIFY?
You need to meet the down payment requirement — which typically ranges from 45% to 55% of the purchase price — and prove adequate income to assure the lender that you can meet your obligations to pay for property taxes, maintenance and homeowners insurance. For the down payment, the money must come from assets you already own, and not from another loan. Typically, people use funds from the sale of their current home; money from a checking or deposit account; or another investment.*
Otherwise, requirements are simple and straightforward. You must be age 62 or older; the home you buy must be your primary residence. To learn more and find out if you may qualify, contact us today.
* Subject to certain restrictions.