Longbridge Financial - HECM - Home Equity Conversion Mortgage

HECM for Purchase – How You Can Buy a House with a Reverse Mortgage

HECM For Purchase: Your Questions Answered

Take a minute to think of your ideal retirement home. Is it smaller? In a warmer climate? Minimal maintenance? Closer to loved ones, family and friends? Whatever it may be, a Home Equity Conversion Mortgage (HECM) for Purchase may be able to help you get there – and a lot easier than you may have originally thought.

But don’t let this acronym scare you off – we’ve compiled everything you need to know about HECM for Purchase, starting with the “what,” “who,” and “why.”

What is HECM for Purchase?

A Home Equity Conversion Mortgage (HECM) for Purchase is a reverse mortgage that allows seniors ages 62 and above to purchase a new home using loan proceeds – all without a monthly mortgage payment.* You read that right – all the borrower assumes responsibility for is the initial down payment, and ongoing property taxes, and maintenance and insurance.

As a borrower, you can choose to repay as much or as little as you’d like each month. The loan does not need to be paid until a maturity event, such as when the home is sold, it is no longer your primary residency, or you pass away. With this flexibility, the HECM for Purchase makes it easy to “right-size” to the home you really want, while keeping in stride with your financial and retirement goals.

Who is Eligible for HECM for Purchase?

Whether you’re ready to downsize, upsize, relocate to a low-maintenance home or more convenient community, or even just settle down in that “dream house” you’ve always imagined,  the HECM for Purchase could be just the solution to help you get there.

To be eligible for the HECM for Purchase program, you must be at least 62 years of age and meet financial criteria as established by the Department of Housing and Urban Development (HUD). In terms of the property, the home must be your primary residence, a single-family home or FHA-approved condominium, and occupied within 60 days of the loan closing. There are also non-FHA programs available, such as Longbridge Platinum, that offer more flexible property eligibility requirements.

Why consider the HECM for Purchase?

  • Downsize, upsize…we call it “Right-Size”
    Whether a home has become too big in terms of physical space, laborious in terms of upkeep and maintenance, or simply no longer fits your lifestyle, selling your existing home and buying a smaller, less expensive home can be a great way to best leverage your home equity and reduce general retirement expenses. As a matter of fact, homeowners who choose to go this route often generate enough money to cover the down payment required for a HECM for Purchase transaction in addition to other ancillary moving expenses.
  • Increase purchase power
    When seniors are looking to buy their perfect home, they’re ultimately looking to increase their purchasing power, and, as a result, get the amenities they desire. Reverse mortgage funds from a HECM for Purchase allow you to afford more home and improve your cashflow.
  • Eliminate monthly mortgage payments*
    By using a reverse mortgage to purchase a property, you can bypass the need to obtain a traditional mortgage. With an adequate down payment, you can buy your ideal home without a monthly mortgage payment.* This not only creates more financial flexibility, but also frees up some cash to cover other costs such as healthcare bills, home modifications, or even assisting family members with large expenses.
  • Retain full ownership of the home
    With a HECM for Purchase, just like a traditional mortgage, you own the home – not the bank. And as the homeowner, you continue living in the home and assume full ownership, as long as the terms of the loan are met.

Ready to make the move?

At Longbridge Financial, we believe in the power of home. But as we age, the increasing reality is that our dream home of 30 years ago may no longer be the home best suited for our retirement years.

If you’re considering making a move, contact us today to see how a HECM for Purchase can help you relocate to a new home, all while keeping your retirement and financial goals in check.

Looking to buy that high-value dream home? You may be able to do so much more affordably than you think. Longbridge Platinum allows you to access more available funds as compared to a traditional HECM – up to $4 million** and still without any monthly mortgage payments.* Learn more here.

*Keeping up with real estate taxes, homeowners insurance, and property maintenance required.
**The state of MA has a maximum loan amount/lending limit of $2,000,000.

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Co-op properties, rental homes, and rental apartments do not typically qualify. Contact a Longbridge specialist for more information.

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By submitting your phone number you are providing your signature and express “written” consent to having Longbridge Financial LLC or our mortgage partners contact you about your inquiry at the phone number you have provided. You agree to be contacted via a live or automated prerecorded telephone call, text message, or email even if you have previously registered on a “do not call” government registry or requested Longbridge to not send marketing information to you. You understand that your telephone company may impose charges on you for these contacts, and you are not required to enter into this agreement as a condition of any Longbridge products or services. You understand that you can revoke this consent at any time by calling Longbridge Financial at 855-523-4326.

For information on how we collect and use personal information, please see our Privacy Notice.