Reverse Purchase Mortgage

Many seniors use reverse mortgages to access the equity in their home, but recent legislation by the FHA now allows seniors to use this loan option for a home they do not yet own. A reverse purchase loan is a unique type of FHA-insured mortgage.

The Home Equity Conversion Mortgage (HECM) was enacted to make the homebuying process faster and easier for seniors, while reducing costs. Rather than buying a new home, paying closing costs, and then getting a reverse mortgage on the new property with additional fees, the HECM for reverse purchase makes this one transaction.

Reverse Purchase Loan

HECM for Purchase

A HECM for Purchase loan allows seniors aged 62 and older to buy a new home with proceeds from a reverse mortgage. Homebuyers can purchase their new home and get the reverse loan with one transaction, whether the homebuyer wants to relocate or downsize.

The program can be used to buy a single-family home, small multi-family home or condominium. You may receive a fixed-rate loan to use toward the purchase of the new home.

HECM for Purchase

Down Payment for an HECM Purchase Loan

There is no down payment necessary for an HECM for Purchase. With a regular reverse mortgage, the loan amount is based on the equity in the home. With a reverse purchase, there is no equity, as the home has not been purchased, but there must be equity to cover accrued interest.

A HECM for Purchase loan typically requires paying about 50 percent of the purchase price of the home in cash. This down payment toward the home purchase must be made regardless of how long the borrower plans to remain in the home.

How to Get a HECM Reverse Mortgage

How to Get an HECM Reverse Mortgage

There are many ways to get an HECM reverse mortgage to buy a home:

  • Buy with a reverse loan. Seniors can choose to buy a new home and then take out an HECM reverse loan at the same time, while paying closing costs just once. The borrower must be able to pay the difference between what they can borrow and the sales price, plus closing costs.
  • Buy with a forward loan and then repay with a reverse mortgage. Another option is getting a regular loan to buy a home and then repaying the mortgage with a reverse mortgage. This requires qualifying for a standard loan and paying both closing costs.
  • Pay in cash and then get a reverse loan. Some borrowers prefer to buy a home in cash and then use a HECM to replace the money.
FHA Insured Mortgage

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Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:
  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020