A reverse mortgage for purchase, sometimes called HECM for Purchase, lets eligible buyers, generally age 62 and older, buy a new primary residence using a reverse mortgage at closing. It can let buyers move into a home that better fits their needs without taking on a traditional monthly mortgage payment.
You bring a substantial down payment, typically from the sale of a previous home or other savings, and the reverse mortgage covers the rest of the purchase price. Like a standard reverse mortgage, you do not make monthly principal and interest payments. The loan is settled when the last borrower no longer occupies the home as a primary residence.
Common scenarios include downsizing into a single-level home, moving closer to family, or relocating to a lower-cost area while keeping more cash on hand for retirement. Because monthly principal and interest payments are eliminated, it can free up income for other priorities.
The loan must be repaid when the borrower no longer occupies the home as a primary residence. Interest and fees accrue and reduce equity over time. You remain responsible for property taxes, homeowners insurance, and home maintenance. HUD requires independent counseling before completing a HECM application.
If you are weighing a HECM for Purchase against a traditional mortgage, book a call below for a side-by-side walk-through.
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Both let you tap home equity. The right tool depends on what you need the money for, how long you need it, and what your current first mortgage looks like.
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