If you would like to be pre-qualified for the hecm purchase program, please call Kat Kronebusch at (714) 400-2691 or apply online!
The Reverse Mortgage Purchase is an option for homeowners who want to relocate, either to be closer to family, to downsize, or move to a home that better meets their needs—a home without stairs, for example—at the same time as converting home equity into cash.
In order to qualify for a reverse mortgage purchase, however, the down payment on the new property must be covered either by the sale of the previous home or through savings or other means.
Reverse Mortgage Down Payment is based on
- Age of youngest borrower
- Current interest rates
Allowable Down Payment Sources
- Cash on hand (Savings, 401k, etc.)
- Proceeds from sale of home
- Gift from family
Proceeds from the sale of the previous home and savings are the most common ways for borrowers to meet the down payment requirement.
There are other acceptable sources of funding under the Federal Housing Administration, which is the insurer for the loan.
Those that are NOT acceptable include sweat equity, trade equity, rent credit and cash (or equivalent) from someone benefiting from the reverse mortgage transaction or a third party that is reimbursed by someone benefiting from it.
Cash advances from credit cards are also not accepted.
For sources that will work to finance the equity portion of the loan, borrowers can use an earnest money deposit or a withdrawal from a savings or checking account or retirement fund.
Some forms of gift money are also OK, including gifts from family members, employers, a charity or government organization with an interest in home ownership initiatives, or a close friend who has a documented interest in the borrower.
Gifts from anyone involved in the transaction in any way are not acceptable.
Other, less common sources of funding can also be used, such as collateralized loans, savings bonds, employer assistance programs, and other means.
*Purchase Reverse Mortgage calculations are for illustration purpose only and are not an offer to lend. If you wish to receive a formal quote with an estimate of all loan charges, as well as an amortization schedule that will show interest accrued year by year please submit your information in the 3rd step of the calculator screen.