HUD recently announced the approval of a purchase product using the reverse mortgage. It opens up a whole new target for marketing the HECM loan. Realtors can now sell homes and finance them with the HECM product. Many seniors may choose to sell their current home and relocate to downsize or to move closer to family.

The calculation software is the same for purchase as it is for a refinance. Instead of receiving cash at closing or each month, they put down a large down payment that varies according to their ages and then never have to make another payment. Not a bad idea for seniors on fixed income. And because there is no qualifying as far as credit, income or assets, other than the down payment, they are relatively assured they can get the loan if they are over age 62 and have enough ready cash to pay down.

If you are interested in more details, review ML 2008-33 at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/08-33ml.doc

If you want to know more about reverse mortgages, email me at info@alliedhomenet.com