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Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 20 years to reverse mortgages exclusively. (License: NMLS# 14040) |
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All Reverse Mortgage's editing process includes rigorous fact-checking led by industry experts to ensure all content is accurate and current. This article has been reviewed, edited, and fact-checked by Cliff Auerswald, President and co-creator of ARLO™. (License: NMLS# 14041) |
Michael G. Branson
Edited by 
Cliff Auerswald
Thinking about buying your next home with a reverse mortgage? This calculator shows how much you can borrow and what you’ll need to bring to closing, including accurate down payment and closing cost estimates.
Understanding Our Reverse Mortgage Purchase Calculator: A Step-by-Step Guide
- Input: Enter your age and the purchase price of the new home.
- Estimating Borrowing Amount: The calculator uses this information to estimate how much you can borrow with a reverse mortgage. This amount, combined with your down payment, helps determine the price range of homes you can afford.
- Factors in Calculation: The calculation considers factors like current interest rates, your age (and your spouse’s age, if applicable), and the sale price.
- No Monthly Mortgage Payments: With a reverse mortgage, you don’t have to make monthly mortgage payments. The loan balance is due when you sell the home, permanently vacate the property, or pass away.
- Amortization Schedules: The calculator also shows how much equity you might retain in your new home after getting the reverse mortgage.
Important Notes:
- The calculator provides an estimate. Actual reverse mortgage terms can vary based on individual circumstances and lender policies. Additionally, the seller has the right to choose the title company during the home purchase process, which can impact the final closing costs. It is essential to consult with your lender and real estate professional to understand all potential costs and terms specific to your situation.
- Consider the long-term implications of a reverse mortgage, including the impact on your estate and home equity.
- Consult with a financial advisor or a reverse mortgage counselor before making any decisions.
Benefits of Choosing a Reverse Mortgage to Buy Your Next Home
As people age, many find they need or want to move but face income limitations that make a conventional loan difficult. This often limits their options to an all-cash purchase, narrowing their choices.
Common Reasons for Moving:
- Retirement communities
- Proximity to family or friends
- Homes that meet medical needs or are more accessible
- Single-story homes or homes with smaller lots
A reverse mortgage can help. It allows borrowers to sell their current home and purchase a new one that better suits their needs without monthly mortgage payments. This can be especially helpful for those looking to eliminate monthly payments and reduce maintenance.
With a reverse mortgage, you can finance roughly half the purchase price of your new home (sometimes more or less, depending on the youngest borrower’s age) without a monthly payment. This flexibility enables borrowers to move into a home that meets their current needs or one they can afford.
Navigating Your Down Payment Requirements
Your down payment for a reverse mortgage can come from savings, the sale of another property, or various other sources, such as proceeds from real estate sales, personal property sales, or cash on hand. This can include funds from 401(k) accounts, stocks, savings, bonds, and other investments. Gift funds from family members are also acceptable.
With a reverse mortgage, you only need to cover part of the purchase price, allowing you to afford a more expensive home without the burden of monthly mortgage payments. This flexibility can help you purchase the home that best suits your needs, even if it initially seems beyond your budget.
2025 HECM Purchase: Down Payment Estimates by Age
| Your Age | % Down | $200,000 Home | $400,000 Home | $600,000 Home | $800,000 Home | $1,000,000 Home |
|---|---|---|---|---|---|---|
| 62 | 64.9% | $129,800 | $259,600 | $389,400 | $519,200 | $649,000 |
| 65 | 62.8% | $125,600 | $251,200 | $376,800 | $502,400 | $628,000 |
| 70 | 59.2% | $118,400 | $236,800 | $355,200 | $473,600 | $592,000 |
| 75 | 56.4% | $112,800 | $225,600 | $338,400 | $451,200 | $564,000 |
| 80 | 52.1% | $104,200 | $208,400 | $312,600 | $416,800 | $521,000 |
| 85 | 46.1% | $92,200 | $184,400 | $276,600 | $368,800 | $461,000 |
| 90 | 39.5% | $79,000 | $158,000 | $237,000 | $316,000 | $395,000 |
What Sets Our Purchase Calculator Apart
| Feature | What Our Calculator Offers |
|---|---|
| Real-Time Rates & APR | See the most current reverse mortgage for purchase interest rates and APR |
| Accurate Down Payment Estimates | Includes closing costs, insurance, and title fees based on your new purchase location |
| No Monthly Mortgage Payments | Understand how much home you can afford without a monthly payment |
| HECM & Jumbo Purchase Options | Explore both FHA-insured and proprietary programs for higher-value homes |
| Amortization Schedules | View long-term equity projections to see how your balance and home value evolve |
| Personalized Results | Estimates based on your age, home value, and purchase price for maximum accuracy |
| Helpful for All Scenarios | Whether downsizing, relocating, or moving closer to family, it’s built for you |
Frequently Asked Questions
What is a Reverse Mortgage for a Home Purchase?
What is the Downside of Buying a Home with a Reverse Mortgage?
While there are no significant downsides to buying a home with a reverse mortgage, it’s essential to ensure that both the borrower and the property meet HUD’s program requirements. If these guidelines aren’t followed, the transaction will not proceed. HUD has specific rules around who qualifies, which properties are eligible, and the associated fees and procedures. Selecting a lender experienced with HUD’s program can help prevent issues and ensure your transaction runs smoothly.
What is the Required Down Payment for a Reverse Mortgage Purchase?
The required down payment for a reverse mortgage depends on several factors:
- Age: The older you are, the larger percentage of the home’s value you can receive.
- Property Value: Higher-value homes require a larger down payment. Homes valued above HUD’s lending limit of $1,209,750 won’t receive additional benefits.
- Interest Rates: Higher interest rates (above 3%) reduce the loan amount you can receive.
- Location: A larger down payment will be required in states with higher closing costs, such as Florida, Washington, New York, Pennsylvania, and New Jersey.
How is a HECM Purchase Amount Calculated?
Is it Hard to Qualify for a Reverse Mortgage Purchase?
Working with a Realtor?
If you’re ready to make an offer on a property and need help explaining the reverse mortgage purchase program to Realtors or sellers, we’re here to assist. We can clarify how the program works and outline the benefits for everyone involved.
Since reverse mortgage purchases have specific requirements, we recommend that you contact us before submitting your offer. This will ensure that both you and your real estate professional are fully informed and up-to-date on all guidelines in advance.
Buying a New Home Without Monthly Payments? We Can Help. With over 20 years of reverse mortgage experience, All Reverse Mortgage, Inc. is America’s #1 rated reverse mortgage lender. We’ll help you understand your required down payment, expected loan amount, and future equity — so you can move with confidence. If you’re ready to explore your numbers, use the calculator now or call us Toll-Free at (800) 565-1722. We’ll answer your questions and help you move forward with clarity.
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