Reverse Purchase Mortgage
Buy a New Home Using Your Equity with No Monthly Mortgage Payments
A reverse purchase mortgage allows eligible homebuyers age 62 and older to buy a new primary residence using a reverse mortgage loan. This means you can purchase a home without taking on monthly mortgage payments, as long as you meet program requirements.
It is a smart option for those looking to relocate, downsize, or move into a more suitable home while using the equity from a previous property or available funds.
How a Reverse Purchase Mortgage Works
A reverse purchase mortgage combines buying a home with reverse mortgage benefits.
- You purchase a new home using a combination of your funds and the reverse loan
- No monthly mortgage payments are required
- You must live in the home as your primary residence
- The loan is repaid when the home is sold or no longer occupied
Quick Overview
| Feature | Details |
|---|---|
| Loan Type | Reverse mortgage for home purchase |
| Age Requirement | 62 years or older |
| Monthly Payments | Not required |
| Property Type | Primary residence only |
| Down Payment | Required (from your own funds) |
| Repayment | When home is sold or vacated |
Why Consider a Reverse Purchase Mortgage
This program is perfect for retirees who want a new living space without added monthly expenses:
- Buy a home that better fits your needs
- Downsize to reduce maintenance
- Move closer to family or preferred locations
- Free up cash by avoiding monthly mortgage payments
- Keep more savings available for other expenses
How Much Do You Need to Put Down
Unlike a standard reverse mortgage, a reverse purchase requires a down payment, usually from savings or proceeds from selling your current home.
- Usually 45% to 65% of the purchase price
- Exact amount depends on age, interest rates, and home value
- Remaining balance is financed through the reverse mortgage
Cost Breakdown
| Cost Type | Description |
|---|---|
| Down Payment | Portion paid upfront by buyer |
| Loan Amount | Remaining balance financed |
| Closing Costs | Similar to standard home purchase |
| Mortgage Insurance | Required for government-backed loans |
Who Can Qualify
To qualify for a reverse purchase mortgage:
- You must be 62 years or older
- The home must be your primary residence
- You need sufficient funds for the down payment
- You must be able to cover property taxes, insurance, and upkeep
- Completion of required counseling is needed
Qualification Snapshot
| Requirement | Description |
|---|---|
| Age | 62+ |
| Occupancy | Must live in the home |
| Down Payment | Required |
| Financial Ability | Must cover ongoing home expenses |
What Types of Homes Qualify
- Single-family homes
- FHA-approved condominiums
- Townhomes
- Some manufactured homes (if eligible)
Reverse Purchase vs Traditional Home Purchase
| Feature | Reverse Purchase Mortgage | Traditional Mortgage |
|---|---|---|
| Monthly Payments | Not required | Required |
| Down Payment | Higher | Varies |
| Age Requirement | 62+ | No age limit |
| Loan Repayment | Later | Monthly payments |
| Best For | Retirees | General buyers |
Benefits of Reverse Purchase Mortgages
- No monthly mortgage payments
- Ability to move into a better-suited home
- Use home equity to support purchase
- Maintain cash flow during retirement
- Simplify housing expenses
Things to Keep in Mind
- Requires a larger upfront down payment
- Reduces remaining home equity over time
- Home must be maintained and occupied
- Not ideal for short-term housing plans
Is a Reverse Purchase Mortgage Right for You
This option may be a good fit if you:
- Want to move into a new home during retirement
- Prefer not to have monthly mortgage payments
- Have funds available for a down payment
- Plan to stay in the home long-term
Unlock Your Home Buying Power Today
Discover how much equity you can use toward your next home and take control of your retirement lifestyle with confidence.