Reverse Mortgages for Home Purchase in Utah
If you're 62 or older, a HECM for Purchase lets you buy a new home with no monthly mortgage payments. Downsize, relocate, or upgrade — without the burden of a traditional mortgage.
What Is a Reverse Mortgage Purchase in Utah?
A reverse mortgage purchase in Utah — formally known as a Home Equity Conversion Mortgage (HECM) for Purchase — is a type of loan available to homeowners aged 62 and older. It allows you to buy a new home without making monthly mortgage payments, making it an ideal option for Utah seniors looking to downsize, relocate, or upgrade.
With a HECM for purchase in Utah, you combine your down payment with the reverse mortgage loan to complete the purchase. Instead of taking out a traditional mortgage with monthly payments, the loan doesn't need to be repaid until you sell the home, move out, or pass away.
(Note: the borrower must maintain the home and remain current on property taxes, homeowners insurance, and HOA dues.)
How the Reverse Purchase Process Works
Confirm Eligibility
You must be at least 62 years old. The home you are purchasing must become your primary residence.
Determine Your Down Payment
The down payment amount depends on your age, the home price, and current interest rates. Generally, the older you are, the less you need to put down.
Complete HUD Counseling
Federal regulations require you to complete an independent HUD-approved counseling session before proceeding with a reverse mortgage.
Work With a Reverse Mortgage Lender
Your loan officer will calculate how much you can borrow based on the home value, your age, and the current interest rate. The remaining balance after your down payment is covered by the reverse mortgage.
Close and Move In
Once approved, you close on the home just like a traditional purchase — but without monthly mortgage payments going forward.
Pros of a Reverse Purchase
No Monthly Mortgage Payments
You are not required to make monthly principal or interest payments. You must still pay property taxes, homeowners insurance, and HOA fees.
Access Home Equity Immediately
Use the equity from your current home sale (or savings) as a down payment and let the reverse mortgage cover the rest of the purchase price.
Ideal for Fixed Incomes
If you have limited retirement income, a reverse purchase removes one of the largest monthly expenses — your mortgage payment.
Downsize or Relocate Freely
Move closer to family, find a single-story home, or relocate to a lower cost-of-living area without the burden of a traditional mortgage.
Things to Consider
Higher Fees & Closing Costs
Reverse mortgages generally have higher upfront costs than traditional mortgages, including mortgage insurance premiums and origination fees.
Interest Rates May Be Higher
Because no monthly payments are made, interest accrues over time and is added to the loan balance, which can grow significantly.
Loan Must Be Repaid Eventually
The loan becomes due when you sell, move out, or pass away. This could impact your heirs or estate planning.
Home Value Risk
If property values decline, you could owe more than the home is worth. However, HECM loans are non-recourse — you or your heirs will never owe more than the home's appraised value at the time of repayment.
Important Disclaimer
A reverse mortgage is not a government benefit; it is a mortgage loan that must be paid back according to the program's requirements. This material is not provided by, nor was it approved by, the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). Cornerstone Home Lending is not affiliated with the U.S. government.
Frequently Asked Questions
How much do I need for a down payment on a reverse purchase?
The down payment typically ranges from 40% to 60% of the home price, depending on your age, the interest rate, and the property value. The older you are, the lower the required down payment tends to be.
Can I use proceeds from selling my current home as the down payment?
Yes. Many buyers sell their existing home and use the equity as their down payment on the reverse purchase. This is one of the most common strategies.
What happens to the home when I pass away?
Your heirs can choose to repay the loan and keep the home, sell the home and keep any remaining equity, or walk away with no obligation. HECM loans are non-recourse, meaning your heirs will never owe more than the home's appraised value.
Do I still own the home with a reverse mortgage?
Yes. You retain full ownership and title to the home. The reverse mortgage is simply a lien against the property, just like a traditional mortgage.
Buy Your Next Home
Find out if a reverse mortgage for purchase is right for you. Speak with a licensed loan officer — no pressure, no obligation.
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