Buy the home of your retirement dreams
without draining your nest egg or sacrificing retirement goals
If you're 62 or older, a HECM reverse mortgage can boost your purchasing power on a new home, with no monthly mortgage payment required — payment of property taxes, insurance, HOA dues, and maintenance are still required. Primary residence only.
Imagine a mortgage where monthly payments are optional.
There's no better “Flex” mortgage than that — you choose your monthly payment. In retirement it's all about flexibility and preserving your hard-earned cash.
Calculate your numbers
Savings, retirement funds, or what you expect to net from selling your current home — after paying off any mortgage on it and covering selling costs.
Use your age within 6 months of closing.
They'd be an eligible non-borrowing spouse — protected from having to leave the home, but the loan is sized on their younger age, which lowers the amount considerably. HUD publishes a separate factor table for this, and we're using it.
Loan assumptions
6.500% · 39.3%The “expected” interest rate is used to determine how much HUD allows you to borrow on your HECM. It's calculated based on what the average 10-Year CMT index did last week, plus the lender's margin. The actual interest rate you're charged on your HECM balance is based on the 1-Year CMT index, plus the lender's margin. The expected rate typically gets updated every Tuesday, so be sure to call or text Chad Peck to find out this week's expected interest rate and make certain your calculations are accurate.
The “initial” rate is what you're actually charged on your balance, based on the 1-Year CMT index plus the lender's margin. It's the rate the loan grows at — plus 0.50% for the FHA insurance premium — and it does not change how much you can borrow. Only the expected rate above does that. It can adjust monthly as the index moves, with a lifetime cap 5% above where it starts, often called a Cap5. Call or text Chad Peck to confirm this week's figure.
A negotiated credit from the seller toward your closing costs. It can't exceed the actual costs or 6% of the sales price, and it can't be paid to you as cash.
A LESA reserves part of the loan to pay your property taxes and homeowners insurance for life, so less of the principal limit goes toward the purchase and you bring more cash to closing. Whether one is required, and how large it is, comes out of the financial assessment — HUD's formula uses your annual property charges, your age, and the expected rate. Ask Chad for your figure and enter it here.
Amortization schedule
What happens after closing.
Once you've bought the home, the balance grows instead of shrinking — there's no monthly payment, so the interest and the FHA insurance premium are added to what you owe. This projects that forward from the figures you entered above, and shows what's left of your equity along the way.
The rate your balance actually grows at. It's separate from the expected rate that sized the loan.
How far out to project. Nothing here is a term — the loan runs as long as you live in the home.
An assumption, not a forecast. Try a low number to see how the projection holds up.
Optional — things you might choose to do
You're never required to pay anything. Some borrowers pay the interest anyway to keep the balance flat.
What the set-aside pays out each year for taxes and insurance. Each disbursement is added to your balance.
Estimated equity
$0
How to read this: the upper line projects the home's value as it appreciates. The lower line is your loan balance, growing as interest and mortgage insurance accrue against it. The shaded gap between them is your remaining equity — the figure this tool is built to track.
| Year | Loan balance | Line of credit | LESA balance | Home value | Equity |
|---|
An illustration, not a loan estimate or an offer of credit. Payments shown here are optional and assumed to be the same every month, which real life rarely is. The loan is sized at the expected rate; the balance accrues at the initial rate above plus the 0.50% FHA insurance premium. Both rates move, and so will these figures.
Why buyers use a reverse for purchase
What this makes possible.
Free up additional cash
Without a monthly mortgage payment, you keep significantly more cash and assets in reserve — money that stays available for living, travel, and the unexpected.
Supersize your purchasing power
Combining a one-time investment of your own funds with reverse mortgage proceeds can put a home with more amenities, or in a more desirable location, comfortably within reach.
Relocate to your ideal home
Whether you want to downsize, move somewhere with upgraded features, or get closer to family and friends, a reverse for purchase helps you right-size to a home that fits your plans now and later.
How the money adds up
Two sources of money buy one house.
Because there's no monthly mortgage payment to plan around, the arithmetic happens once, at closing. Everything in the calculator above is just these three terms moving against each other.
Your cash
Savings, retirement funds, the net proceeds from selling your current home, or a documented gift. It can't be borrowed money, and we'll need to verify where it came from.
Principal limit
Set by the age of the youngest borrower, the expected interest rate, and the lesser of the purchase price, the appraised value, or the FHA lending limit of $1,249,125.
The home
Purchase price plus closing costs. The loan balance grows over time with interest, and comes due when the last borrower sells, moves out for good, or passes away.
See how the loan balance, your home’s value, and the equity left to your heirs move year by year — with or without voluntary payments.
Myth vs fact
The most common misconceptions of a reverse mortgage.
Bank gets the house
You retain title to the property, the same as with any other mortgage.
Disinherit the kids
Your beneficiaries can inherit the home, with all of the remaining equity.
You may have to move
The loan is not due when the money is used up.
Owe more than the home is worth
Loans are non-recourse and insured, and cannot attach to your other assets.
You can't make payments
Payments are flexible, not forbidden. They just aren't required.
Things to remember and consider
- Property taxes and homeowners insuranceFalling behind can put the loan into default and lead to foreclosure.
- HOA dues and upkeepThe home has to stay in good repair and meet FHA property standards.
- OccupancyThe home must be your principal residence. Each year, on the anniversary month of your closing, you must certify to the lender that at least one borrower still occupies the home.
- TitleYou own the home, not the lender. You can sell it at any time without penalty or approval, just like any other mortgage. You can even hold title in your revocable living trust.
- A balance that growsAssuming you don’t make monthly payments, interest and FHA mortgage insurance accrue on what you borrow, so the equity left to your heirs usually gets smaller over time — depending on what happens to your home’s value. If the future is like the past, your home’s value should continue to appreciate as well.
Start to finish
Seven steps to complete your reverse mortgage for purchase.
- 1EducationMeet with Chad Peck, your Reverse Mortgage licensed loan officer, and gather what you need to decide whether a reverse mortgage is right for you.
- 2Identify the right homeEither a new build or an existing home that meets your goals.
- 3Independent HUD counselingHUD requires a session with an approved counselor before anything moves forward. It's separate from us.
- 4ApplicationComplete your application and provide the documentation needed for approval. This is where your expected rate gets locked for a period of time to secure your calculations.
- 5AppraisalWe order the appraisal on your behalf to determine the home's value. A second appraisal may be required upon review.
- 6Processing and underwritingWith the appraisal, title, and your documentation in hand, your file goes to underwriting for formal approval.
- 7Closing and fundingOnce your loan is approved and the underwriter signs off, closing is scheduled, final documents are signed, and funds are disbursed. Occupancy must take place within 60 days of closing.
After you close
Servicing after closing.
Once your loan funds, the day-to-day handling of it moves to the Reverse Mortgage Servicing Department, the portal used across the industry. These two are worth bookmarking.
That said, we're here for you for the life of your loan. Call Reverse Freedom Mortgage for your basic questions and reviews — you won't need the 1-800 servicing line. Call us first; we can usually help.
Other options
The HECM isn't the only reverse mortgage.
The FHA-insured HECM has historically been the go-to for buying a home, and it's the product this page calculates. There's also a second family — proprietary reverse mortgages — that aren't government-insured and follow their own rules.
- Different names, same ideaDepending on the lender they're called Platinum, Secure Equity, or HomeSafe. Each has its own qualifying factors, its own loan amounts, and its own interest rate factors.
- CondominiumsSome condos don't qualify for a HECM. A proprietary program is often the way to buy one.
- Higher-priced homesA HECM sizes the loan on the FHA limit of $1,249,125 no matter what the home costs. Above that, a proprietary loan may lend on more of the value.
Every situation is different, and the right product depends on what you're trying to accomplish. Call or text Chad and he'll help you work out which one fits.
Testimonials
Hear it from clients.
The Jensen story
Reverse Freedom Mortgage client
The Davis story
Reverse Freedom Mortgage client
Your next step
Take the next steps towards your retirement dream home.
Here's what I know: every situation is its own. This page will give you a real idea of what's possible, but it can't replace a conversation about what your options actually look like.
Reach out and I'll put together a personalized evaluation — your actual principal limit, today's expected rate, an itemized cash-to-close figure, and as many scenarios as you'd like to run. Different prices, different homes, different timing. A reverse mortgage is not one size fits all. It gets tailored to your situation and to the chapter of life you're in.
Call or text me directly, or send the short form and I'll have what I need to schedule your evaluation. There's no cost and no obligation. I love the planning side of this work, and I love this program.
Send my numbers to Chad Peck
Chad will be notified and will reach back out to schedule your consultation. In the meantime, feel free to call or text him at 801-809-3872 for a faster response.
- Purchase price
- —
- Cash to close
- —
- Age of youngest borrower
- —
Got it — thank you
Chad will be in touch shortly.