HECM for purchase or H4P

There is a revolutionary product out there for people looking to buy a home using a reverse mortgage. As we discussed in previous articles HECM stands for Home Equity Conversion Mortgage which is the official name for the reverse mortgage. The H4P or HECM for purchase is a reverse mortgage used to buy a home. In the past people who wanted to buy a home and utilize the reverse mortgage would have to purchase the home all cash or with a traditional mortgage and then immediately refi into the reverse. A few years ago lenders decided to combine the purchase and reverse so borrowers could do one transaction.

With H4P, the borrower can put down 35 to 50% of the purchase price (depending on age) and the reverse lender will put down the remainder of the purchase price. Then no mortgage payments are ever required as the lender eats into the money the borrower put down to make the payments. Then once the borrower(s) pass away or sell, they pay the lender the original loan amount and the interest that accrued, then the family can either sell and keep the additional equity or refinance out of the reverse to keep the home. So the H4P works just like a traditional reverse but for the purposes of purchasing a home. Downsizing etc.

Approved properties for the H4P include single family homes, manufactured and FHA approved condos. H4P is a product that is amazingly underutilized mainly due to Realtors and other financial advisors not being as well versed as they should be. We make it a point to educate all of those who want to know more. Soon more and more people will be utilizing the H4P product. Contact us today for more information regarding anything relating to a Reverse Mortgage.