With a HECM You Won’t Ever Make a Mortgage Payment Again
Creating or finding a home to age in place can be difficult. You may feel you don't have options to move. You could pull equity out of your home, but you still need that age-appropriate home. Enter the Home Equity Conversion Mortgage for Purchase (HECM).
Let's say you are living in a home with a $750,000 value. Your mortgage balance is around $150,000. That leaves you with $600,000 of equity, minus closing fees and costs nets you around $550,000 profit upon sale. It can be tough to find an age-appropriate home for $550,000 today.
Nicole's guest, Gabe Bodner, Reverse Mortgage Specialist at The Rueth Team Fairway Mortgage, gives an example of how this works.
BUT, if you take the $550K, find a home for $650K to buy. You are able to put 50% as a down payment - that's $325,000. If you walked away from your previous home with $550,000, that's a boatload of cash AND a new age-appropriate home And, there is no required mortgage payment with the HECM. When the loan comes due, the home is sold to pay off the loan. Since your home will continue to build equity, you or your heirs will still end up ahead and you will have made no mortgage payments.
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