House Talk Episode 20 – Home Equity Conversion Mortgage for Purchase program from Retirement Funding Solutions with Kathy McDonald
Karen Malanga: Hi, this is Karen Malanga with another edition to House Talk. I want to welcome Kathy McDonald from Retirement Funding Solutions to the program.
And just to give a bit of background to our listeners, I met Kathy through some terrific buyers. And when we put their offer together on their new home, they submitted a preapproval and it had come from Kathy.
And I read the preapproval, and it was a loan that I wasn’t familiar with. And it was an exciting solution for these particular clients.
And so, Kathy, that’s why I invited you to be here today. And I’m hoping you can explain what your loan program is to others and then how can they get a hold of you.
Kathy McDonald: I’d be happy to. Thanks, Karen. It’s a pleasure to be here. I appreciate it.
Karen: Oh, great.
Kathy: It is a very unusual program and not a lot of the population knows about it. Actually, only about 1% of the population knows about this loan.
Karen: Well, it’s good you’re here then.
Kathy: That’s why it’s so exciting. Well, let me just go ahead and let you know that the name of the program is first. It’s called the Home Equity Conversion Mortgage for Purchase program.
Kathy: So, that’s too long to say each time, so we just talk about it—we have a nickname for it using an acronym. We just call it the HECM for Purchase program.
Karen: Okay. Great!
Kathy: And what this allows people to do is it will allow someone who is—at least of the homeowners needs to be 62 or over. And it allows them to double the purchasing power in order to purchase a retirement home.
Karen: Okay. And how do they go about that?
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Kathy: How they go about that is there is just a few qualifications. It’s not like your typical loan financing program. But what it is, is one of the homeowners needs to be—or buyer, excuse me—needs to be at least 62 years of age and over, and it’s for the purchase of their primary home.
Now, when I say primary home, they just have to live in this home for six months out of the year. So, they can own other properties.
Kathy: And what this allows them to do is not have a monthly mortgage payment in retirement.
Karen: And how is that accomplished? I hate to use the word “reverse mortgage” because people always have this connotation about those, but it sounds like this something similar.
Kathy: It is similar. What it is is it was developed out of the reverse mortgage program. And the reverse mortgage program, they had determined that people were purchasing their homes and then refinancing into a reverse mortgage later on down the line.
Kathy: So, what HUD and HFA and the lenders put together was a program that it’s different on the frontend where people bring in their down payment, and it is a reverse mortgage on the backend where they don’t have that monthly mortgage payment.
And the amount that someone brings in a closing is based on their age and of course the purchase price of the home. So there’s a calculation. And it allows some people to double their purchasing power.
So, this allows them to get into the home that they really would like to. It helps them with their lifestyle, that they can maintain their existing lifestyle, or they can also enhance their lifestyle as well with the use of this program because they’re not using all of their cash to put down, to pay 100% cash and to avoid that monthly mortgage payment.
Karen: I understand. It also would also free them up to keep some money in other investments too like their retirement account, et cetera, I would think.
Kathy: Yes, it does and that’s one of the benefits to this program.
Karen: Especially with low-interest rates now. I’ve had several financial advisors advise clients to go into something like this because their retirement funds are actually making more money on one side. And to take the money out of there to put it into a mortgage on the other side just doesn’t make financial sense.
Kathy: That’s correct. And a lot of the folks that I am working with are referred to me by financial advisors.
Karen: This is terrific, Kathy. I want to just say one word to our listeners too. We deal with different mortgage brokers and programs all day long in my office, and each mortgage broker is different. But Kathy was impeccable, on time. We could close early. My clients were well-informed about what they were signing. I have really never worked with anyone as organized as you.
Kathy: Thank you.
Karen: So, Kathy, if you wouldn’t mind just telling our listeners how they can get a hold of you and learn more about your program? I wish I was 62. I’m almost there, but not quite. So, if you would like to just give your contact information, that would be fantastic—and thank you.
Kathy: Sure. My name is Kathy McDonald. My phone number is (541) 921-8814. My email address is firstname.lastname@example.org—and that stands for Retirement Funding Solutions.
Kathy: And what I would like to also mention is that Karen has some booklets in regard to giving a little bit more information about this program. And it is really helpful in helping to understand the program more in-depth. And you can also give me a call if you’re not anywhere near Karen to stop in and pick up one of these booklets. I can certainly go ahead and get one to you.
Karen: Thank you, Kathy. Yes, I do have a nice supply of the booklets. I’m anxious to give them out to people. I’m excited about your program.
Kathy: I am too. I’m really excited. It’s so fun seeing people use this program.
Karen: It’s exciting when you give them the keys and they’re all happy, and they’re able to move forward with their retirement and they have a got great home in Bend, Oregon. It’s great.
Kathy: It is very much so.
Karen: Well, thank you again.
Kathy: Thank you, Karen. My NMLS ID number is 260446. Our Oregon mortgage license number is ML-5208. And Retirement Funding Solutions NMLS ID number is 1025894.