Denver Post: H4P Sweetens the Deal for Retired Home Buyers

For older homeowners looking to buy the retirement home of their dreams, a reverse mortgage can help sweeten the deal via a Home Equity Conversion Mortgage for Purchase (H4P), according to a recent article published by The Denver Post.

An H4P gives borrowers the ability to eliminate their mortgage payment, while also enhancing their buying power—all features that make these particular loans ideal for buyers who want to purchase a new home in retirement, writes The Denver Post.

“With the option of no mortgage payment, you greatly reduce your living costs and boost retirement cash,” says Larry Armstrong, a reverse mortgage loan specialist with Reverse Mortgage Funding, in the article. “And reverses have no effect on most other sources of income you’ll keep receiving, including Social Security and Medicare.”

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Reverse mortgages can be especially beneficial for retirees who want to move into more aging-friendly abodes, as well as those interested in downsizing into a smaller residences or moving closer to family and friends. Despite the benefits, however, reverse mortgages remain largely misunderstood.

For one, reverse mortgages, Armstrong said, are “real mortgages”—not a device that relinquishes ownership of the homeowners’ residence.

“Once you understand what a reverse mortgage is, you realize how well suited they are for somebody purchasing a new home to retire in,” said Armstrong, who has reoriented his enter business concept around HECM and H4P loans.

One practical use for reverse mortgages that not many people know about is using these loan products to assist with estate planning.

“It’s a nest egg,” said Carl Lyday, a Realtor with Metro Brokers Front Range Properties, who is now closing on a reverse mortgage to refinance his home in Stonegate, Colo. “We’ll take out 50% and put it into a line of credit at 4.5%.”

A new believer in reverse mortgages, Lyday is now oriented part of his Realtor practice to help buyers use H4Ps.

Read more at The Denver Post.

Written by Jason Oliva

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