HECM for Purchase Is On The Rise
Due to the shifting rates that have occurred over the past several months, the Reverse Mortgage Division has seen a huge increase in home equity conversion mortgage (HECM) for purchase business. Almost 20% of reverse mortgage business last year was H4P and that has only continued climbing as we finish Q1 of 2023.
Most seniors who need to move or want to move, do not qualify for a conventional loan these days. They are on a restricted income and there is no way that their DTI will allow for them to purchase a home and still have a mortgage payment. Using a HECM for Purchase allows them to eliminate their monthly mortgage payment on their new home. The average H4P borrower is currently around 75 years old, putting down about 60% to have no mortgage payment. When offered the option of a conventional loan that they may not qualify for and have a mortgage payment or the option of a H4P with no mortgage payment, the answer is a no brainer!
We have also seen a huge increase in real estate professionals wanting to learn about the product. It is a great way to help their buyers who may not have the option of a conventional loan but still need to move. Introducing realtors to such a unique and helpful product only helps increase their business as well as yours.