“You can buy a new home at 62+ and never make another monthly mortgage payment.”

The Reverse Advantage: Buy Smart and Preserve Retirement Income

If you’re 62 or older and thinking about buying a new home—whether to downsize, move closer to family, or start a new chapter in retirement—you might be surprised to learn you can use a reverse mortgage to do it.

This option is called a HECM for Purchase (Home Equity Conversion Mortgage), and it lets you buy a primary residence with no monthly mortgage payments—while keeping more cash in your pocket.

🏠 What Is a HECM for Purchase?

A HECM for Purchase (or H4P) allows eligible buyers to finance part of the home purchase using a reverse mortgage, while covering the rest with a down payment. The result? You own the home, and you won’t be required to make monthly mortgage payments as long as you live in it and meet basic loan obligations (like paying taxes, insurance, and maintenance).

This can be an ideal solution for retirees who want:

• To right-size into a more manageable or accessible home

• To relocate near adult children or grandchildren

• To move into a single-level or age-friendly layout

• To free up cash for travel, emergencies, or retirement planning

💰 How Much Is the Down Payment?

Your required down payment will depend on:

• Your age (or the age of the youngest borrower)

• The purchase price of the new home

• Current interest rates

The older you are, the less you may need to put down. In general, most buyers use proceeds from the sale of a current home to cover the down payment and closing costs.

🔍 Key Differences from a Traditional Mortgage

• No monthly principal & interest payments required

• HUD-approved counseling is mandatory before moving forward

• The home must be your primary residence

• Your name remains on title—you own the home

👨‍👩‍👧 Real-Life Example

For this example, we’ll use a 70-year-old couple who sells their two-story home for $500,000 and wants to purchase a $400,000 single-story home closer to family. Depending on the current interest rate environment (typically ranging from 5.5% to 7.5%), they may be required to contribute approximately 45% to 60% of the purchase price as a down payment. their two-story home for $500,000 and wants to purchase a $400,000 single-story home closer to family. Depending on the current interest rate environment (typically ranging from 5.5% to 7.5%), they may be required to contribute approximately 45% to 60% of the purchase price as a down payment.

In this scenario, they contribute between $180,000 and $240,000, and finance the rest through a HECM for Purchase.

✅ The result: They own the home outright, have no required monthly mortgage payments, and retain the remaining proceeds from their home sale to invest, save, or use during retirement.

💬 Final Thought:

HECM for Purchase is one of the most underutilized tools available to older homebuyers. If you're considering a move and want to preserve cash flow in retirement, I’d be happy to show you what this option could look like based on your goals and age.