Housing costs are often the largest expense for households in retirement, so it is important to consider a Home Equity Conversion Mortgage for Purchase (HECM) loan. This loan allows seniors age 62 or older to buy a new primary residence with loan proceeds from a reverse mortgage. The HECM loan was developed by the federal government in 1988 and was later modified in 2008 to include the option to buy a new home. Most homebuyers are financing their new home purchases, and over 40% of retirement age homeowners are still carrying mortgage debt. The HECM loan offers a better way to pay for a retirement home by allowing a large one-time down payment that eliminates the monthly principal and interest payment requirement. The article recommends reaching out to a financial advisor to determine the best payment option and to explore tax planning possibilities. Buying a new home is not just about finances, but also about creating a space for important life events and having extra money for them.

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