For many older adults, retirement brings big questions about where and how to live. Maybe you’re ready to downsize, move closer to family, or find a home better suited to aging in place. But the idea of taking on a new monthly mortgage payment? Not so appealing. That’s where a reverse mortgage to buy a home could offer a more flexible path forward.
Here’s the good news: You can use a reverse mortgage to buy a home. It’s called a HECM for Purchase, and it’s one of the most flexible, lesser-known options in retirement financing.
Let’s walk through how it works, who it’s for, and what you need to know to get started.
What Is a HECM for Purchase?
A HECM for Purchase (Home Equity Conversion Mortgage for Purchase) is a government-backed reverse mortgage program that lets homeowners 62 and older use a reverse mortgage to buy a new primary residence.
It works similarly to a traditional reverse mortgage:
- You must live in the home as your primary residence.
- You don’t make monthly mortgage payments.
- The loan is repaid when you leave the home, sell, or pass away.
A HECM for Purchase allows you to combine a large down payment (usually from the sale of your current home or savings) with reverse mortgage funds to buy a new home, but without a monthly mortgage payment.
Who Can Use a Reverse Mortgage to Buy a Home?
A reverse mortgage for purchase can be a great fit for:
- Seniors who want to downsize into a more manageable or accessible home
- People relocating to be closer to family, healthcare, or better weather
- Retirees looking to buy a home without monthly payments
It’s also a smart option for those who want to reserve cash, preserve investments, or reduce fixed expenses in retirement.
How the Process Works
Here’s a simplified look at how a HECM for Purchase usually works:
- You sell your current home (or use other savings) to fund the required down payment.
- You work with a reverse mortgage specialist to determine how much you qualify for based on your age, the home value, and interest rates.
- You choose a home that meets your needs
- You bring your down payment to closing, and the reverse mortgage covers the rest. That’s it!
You move in and enjoy the home with no monthly mortgage payments.
Key Benefits and Considerations
Benefits:
- No monthly mortgage payments
- Ability to right-size your living situation
- Keep more of your retirement savings intact
- Increase cash flow and reduce housing expenses
Considerations:
- Must occupy the home as your primary residence
- Must keep current on Property Taxes and Home Owners Insurance
- If you move out or pass away, the loan is settled using the home’s value. Your heirs won’t inherit debt or owe money out of pocket.
Check out our 5 Myths of Reverse Mortgages
How Zenith Can Help
If this is your first time hearing about HECM for Purchase, you’re not alone. Many lenders don’t take the time to explain this option clearly. At Zenith, we walk through every scenario and answer your questions with transparency and no pressure.
We can help you:
- Understand if this strategy fits your goals
- Explore down payment options and home qualifications
- Coordinate the sale of your current home and the purchase of your next one
Learn More or Take the Next Step
Using a reverse mortgage to buy a home might sound surprising—but it could be the key to a more comfortable, affordable retirement.
Explore the different types of reverse mortgages available or schedule a no-pressure call with our team to learn more about your options.
