Using A Reverse Mortgage To Purchase

Reverse Jumbo goes as high as $4M

What is HECM for Purchase?
A Home Equity Conversion Mortgage (HECM) for Purchase is a reverse mortgage that allows seniors,
age 62 or older, to purchase a new principal residence using loan proceeds from the reverse
mortgage.

What’s different about HECM for Purchase versus a traditional mortgage?
Borrower age
• HECM for Purchase: Exclusively for home buyers age 62+.
• Traditional mortgage: No age restriction (except being legal age to enter a contract).

Repayment requirements

• HECM for Purchase: Flexible repayment feature — The borrower can choose to repay as much or as
little as they like each month, or make no monthly principal and interest payments. The flexible
repayment feature makes it easier for a buyer to afford the home they really want, preserve more
savings and retirement assets, and improve cash flow. As with any mortgage, the borrower must keep
current with property-related taxes, insurance and maintenance as part of their ongoing loan
obligations. Repayment is generally required once they sell the home, pass away, move out or fail
to meet their loan obligations.
• Traditional mortgage: Monthly principal and interest payment required. Builds equity
as the loan is paid down.

Down payment amount

• HECM for Purchase: Required down payment between approximately 45% and 62% of the purchase
price, depending on buyer’s age or Eligible Non-Borrowing Spouse’s age, if applicable. (This range
assumes closing costs will be financed.) The rest of the funds for purchase come from the HECM
loan. This allows the buyers to keep more assets to use as they wish, as compared to paying all
cash, while still having the flexibility of no required monthly mortgage payments.  Down load the e-book (link is above).