Reverse Mortgage Purchase

Are you interested in learning more about a reverse mortgage purchase or getting started with the process? At Standard Lenders, we can provide you with exceptional care and personalized advice to guide you through the process of how to purchase a home with a reverse mortgage in a way that works with your circumstances. If you want to purchase a home with a reverse mortgage, let us help you.

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Using A Reverse Mortgage to Purchase a Home

Purchasing homes with reverse mortgages is possible, but the HUD allows you to use the money received through a reverse mortgage to purchase a home only if you can use cash on hand to pay the difference between the reverse mortgage proceeds and your sales price of the new home, plus the closing costs for the purchased property. Like other reverse mortgages, reverse mortgages for purchase loans do not require monthly payments, but you will still need to meet the other regular requirements for a reverse mortgage.

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    Exceptions to Purchases with Reverse Mortgages

    Not every home is eligible to be purchased with reverse mortgages, and not every potential purchaser will qualify for this type of loan program. Some co-op units and manufactured homes have various reasons for ineligibility. Borrowers have to commit to living in the home as a principal residence and keep the home in good condition while paying property taxes and other related expenses on time or else forfeit eligibility.

    If you’re unsure whether your potential purchase with a reverse mortgage falls under one of these exceptions, Standard Lenders is here to help you make a plan to fit your individual circumstances.

    Down Payment Requirements

    An important aspect of how to purchase with reverse mortgage money concerns the requirements for down payments. These requirements are set by the United States Department of Housing and Urban Development (HUD) rather than coming from the state of California or from Standard Lenders, but we can help you to understand them so you know how you can best qualify.

    Down Payment Calculation

    Generally, the down payment is based on current interest rates, the age of the youngest borrower, and the sales price for the home purchased with reverse mortgage money. If the sales price is beyond the maximum lending limit, which is currently $822,375, that limit will be used for the metric instead. This helpful chart will provide an overview of what numbers to expect.

    HECM Purchase Down Payment by Age

    Sales Price
    $300000
    $400000
    $500000
    $600000
    $700000
    AgeDown Payment Down Payment Down Payment Down Payment Down Payment
    62$154,496.49$203,601.49 $252,601.49$301,601.49 $350,601.49
    65$148,901.49$196,001.49$243,101.49$290,201.49 $337,301.49
    70 $138,701.49 $182,401.49$226,101.49 $269,801.49$313,501.49
    75$129,401.49$170,001.49 $210,601.49 $251,201.49$291,801.49
    80$118,601.49 $155,601.49 $192,601.49 $229,601.49$266,601.49
    85$105,401.49$138,001.49 $170,601.49$203,201.49 $235,801.49
    90$91,601.49 $119,601.49 $147,601.49$175,601.49$203,601.49

    Down Payment Sources

    There are a variety of sources for down payments that can be used to purchase a home with a reverse mortgage. Down payment sources include cash on hand, such as from savings or 401ks, proceeds from the sale of a home, and gifts from family. If these numbers and requirements feel overwhelming, please reach out to Standard Lenders. You don’t have to do this alone.

    Request a Free Quote

    If you’re considering completing a purchase with a reverse mortgage, the next step is requesting a four-step free quote from Standard Lenders to work through the process. By providing us a few pieces of information, we can get started with your individualized plan for your home purchase with a reverse mortgage.

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