Reverse Mortgage Purchase | Down Payment Requirement
Wondering what a reverse mortgage is, and whether it can be used in the purchase of a new home? It sure can, in a process called a Home Equity Conversion Mortgage Purchase. Basically, a new home is bought at the same time a reverse mortgage is taken, and the transaction is rolled into one.
It’s 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 purchase reverse mortgage, 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.