September 2, 2021

Buy Your Retirement Dream Home & Increase Your Cash Flow in Retirement

By Alan Tenney
Mutual of Omaha Mortgage
Reverse Mortgage Specialist

If you dream about a new home in a warmer climate, better neighborhood, closer to family and grandchildren, modern design, amenities, and low maintenance, then you owe it to yourself to learn about the powerful alternative to using traditional financing or paying cash to purchase your next home and doing all of this while retaining a large portion of your life savings with a Home Equity Conversion Mortgage for Purchase (H4P).

Betty Johnson, a client of mine, had this dream and her dream became reality. “At the time, I was living in a small home with no garage in an area far away from my family and friends. My loan officer explained to me how the HECM for Purchase would allow us to move into a wonderful newer home that I would be thrilled with. I supplied some of the equity from the sale of my old home and used the HECM for Purchase loan for the rest of the purchase price. The best part is I do not have a mortgage payment, didn’t touch my retirement funds, and now have additional funds to use for other things that will come up down the road,” said Betty.

You are probably asking yourself, “What the heck is a HECM?” This is a little-known strategy that middle income and affluent Boomers, like you, have been using since 2009 to purchase their dream homes. This is a federally insured loan program for buyers 62 years of age or better that requires a one-time down payment of 45-60%, and then the buyers are never required to make another mortgage payment.

Why should you consider the HECM for Purchase option instead of paying cash or taking out a traditional mortgage? Perhaps you would like to have a bigger slice of the P.I.E. A buyer using all cash to buy a home has created a negative impact on their liquidity, while a buyer with a mortgage sees a negative impact on their monthly cash flow. Either option can shorten their financial horizon and create financial instability and sleepless nights for the retiree in their new home. The HECM for Purchase option gives the buyer a way to:

  • [P]reserve assets
  • [I]ncrease their cash flow
  • [E]nsure liquidity

If more P.I.E. in your retirement sounds appealing, it might be worth your while to look at the HECM for Purchase option as you contemplate buying your dream retirement home.

*Buyers remain responsible for the ongoing payment of property taxes, homeowners insurance, and any required association dues. They must also maintain the property to minimum standards.

Alan Tenney is HCEM Specialist for Mutual of Omaha Mortgage. He can be reached at (319) 215-7972 or atenney@mutualmortgage.com,

Filed Under: Finance, Retirement