Many homeowners want to remain homeowners, but not in their current house

2014-04-14T23:00:00Z Many homeowners want to remain homeowners, but not in their current houseMichelle Krueger, Times Correspondent The Billings Gazette
April 14, 2014 11:00 pm  • 

With 10,000 baby boomers turning 62 years of age every day, the option of a Home Equity Conversion Mortgage (HECM) can help increase their purchasing power and flexibility when right-sizing to an all-on-one-floor maintenance-free home that offers a more carefree lifestyle while lowering their cost of living during retirement.

“The HECM for Purchase 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,” Dru Bocek, a reverse mortage specialist with First Midwest Bank who has been exclusively working in the field for more than eight years now, explained. “Regardless of how long you live in the home or what happens to your home’s value, you only make one, initial investment (down payment) towards the purchase – you can eliminate monthly mortgage payments and preserve your cash.”

According to the experts at Wilcox Communities, which is making it easier for buyers by offering the federal program in nearly 30 maintenance-free communities across seven states including Valparaiso’s Courtyards at Pepper Creek and Villas at Vale Park, the program might just be the perfect way for empty-nesters to take financing from daunting to doable.

A family-owned company and Builder Partner of EPCON Communities, Wilcox strives to make purchasing a new home as enjoyable and stress-free as possible.

Introduced in 2009, HECM for Purchase is a variation of the traditional reverse mortgage and is designed for seniors ages 62 and older. Eligibility requirements, as stated by the FHA, include:

• Must be 62 years or older

• Any property used as collateral must be the primary residence

• Down payment must come from asset accounts (cannot be debt)

The FHA also requires prospective loan applicants to be free of federal debt delinquencies, suspensions and debarments.

HECM loans are designed to be hassle-free and allow buyers to purchase their dream home. For example, maintenance-free living in a brand new ranch-style home with 2 or 3 bedrooms with flexible and spacious living areas plus luxury features throughout in one of the Wilcox Valparaiso communities can be achieved with as little as 44 percent down. In addition, with the HECM loan, homebuyers enjoy not having to write out a monthly check with no monthly mortgage payments.

A strong proponent of hassle-free living, Wilcox seeks out the best possible Midwest locations for their communities with both the Courtyards at Pepper Creek and Villas at Vale Park allowing residents to take advantage of everything Valparaiso, Ind., and nearby Chicagoland have to offer. In addition, Wilcox Communities employs a professional association to maintain individual home and overall community exteriors allowing homeowners to leave behind the hassles of exterior upkeep including mowing, weed removal, fertilization, walk and driveway care and snow removal.

Available to finance the purchase of any primary residence, HECM for Purchase closing costs are similar to a regular FHA insured mortgage and are financed into the mortgage. They can include loan origination fee, FHA mortgage insurance premiums, a servicing fee, interest and certain third party fees. Loan amounts vary and the amount a buyer is required to bring to the home closing will vary depending on the youngest borrower's age and the purchase price of the home. A homeowner choosing a HECM loan is not personally liable for payment of the debt. The mortgage insurance fund that FHA manages assures that if the mortgage balance becomes greater than the loan balance, neither the borrower nor their heirs are liable for the deficit. FHA pays the lender the difference. Contact a reverse mortgage specialist for complete details.

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