In a recent Georgetown University study, over 90 percent of senior citizens choose to live in their own home after retirement. Yet many worry that moving into a new home that is appropriately sized once the kids have left will be difficult on a fixed income.
A relatively new program created by the Federal Housing Administration (FHA) is helping to alleviate these worries. The Home Equity Conversion Mortgage (HECM) for Purchase (often referred to as H4P) was designed in 2008 to assist homeowners 62 or older buy a home that suits the retirement life style.
This home financing program is designed specifically to get seniors the funds they need to buy a home by combining a down payment with loan proceeds from a HECM. The most appealing aspect of the process: no monthly mortgage payments. Furthermore, the loan is easier to qualify for.
As for conventional mortgages, today conforming no point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381–8888 and your question may be featured in an upcoming article.