Reverse Mortgage Home Purchase Loan Calculator
- By Jim Blackburn
- on
- Tags: Calculators, New Construction, Spec Homes
Buy Your Next Home With No Monthly Payments for Life
If you’re 62 or older and considering downsizing, relocating, or simply purchasing your forever home without the burden of monthly mortgage payments, a reverse mortgage for purchase (H4P) can be a powerful solution. This guide breaks down how much equity you need, what your new home could cost, and how the numbers play out.
Key Borrower & Property Inputs
| Input | Value |
|---|---|
| Oldest Borrower Age | 72 |
| Equity from Selling Current Home | $300,000 |
| New Home Purchase Price | $500,000 |
| Annual Property Taxes | $3,600 |
| Annual Insurance | $2,400 |
| Monthly HOA | $0 |
Summary of Reverse Mortgage Purchase
| Detail | Amount |
|---|---|
| Estimated Gap Needed <small>(To reach total purchase price)</small> | $200,000 |
| Estimated Reverse Mortgage Loan <small>(Based on borrower age and HUD limits)</small> | $226,500 |
| Upfront FHA Mortgage Insurance (UFMIP) <small>(1.75%)</small> | $3,964 |
| Final Loan Amount (Base + UFMIP) | $230,464 |
Note: Reverse mortgage loan amounts are based on HUD guidelines and vary by county limits and borrower profile.
Monthly Housing Expense (No Mortgage Payment!)
| Expense | Monthly Amount |
|---|---|
| Principal & Interest | $0 |
| Property Taxes | $300 |
| Insurance | $200 |
| HOA | $0 |
| Total Monthly Housing Costs | $500/month (no mortgage payment required) |
Estimated Out-of-Pocket Funds Needed
| Scenario | Cash to Close |
|---|---|
| Without Seller Credit | $256,500 |
| With 6% Seller Credit | $226,500 |
After preapproval, your loan officer will provide an official breakdown of what sellers can cover, ensuring your purchase offer is structured to reduce your out-of-pocket expenses.
Income Guidelines to Qualify
| Requirement | Amount |
|---|---|
| Monthly Income Target <small>(To meet FHA DTI guidelines)</small> | $1,000 |
FHA typically allows up to 43% debt-to-income ratio, and sometimes as high as 50% with strong compensating factors such as cash reserves or a long history of timely payments. Community property rules may apply to non-borrowing spouses.
Protect Your Legacy While Enjoying Your Home
Already have a living trust set up? Or thinking about legacy planning? A reverse mortgage purchase can be paired with a well-structured estate plan, including:
- Living Will
- Living Trust
- Asset Protection Strategy
- Multigenerational Wealth Planning
Ask us how we can connect you with trusted legal professionals to help design your legacy.
Ready to Buy With Confidence?
A reverse mortgage home purchase allows you to use equity from a previous residence to buy a new home—with no mortgage payments, ever. Whether you’re looking to downsize, relocate closer to family, or enjoy retirement without monthly obligations, our team can guide you from preapproval to closing.
Get a Reverse Purchase Approval
Ready to Take Your First Step?
Skip the guesswork. Take our quick Discovery Quiz to uncover your top financial priorities, so we can guide you toward the wealth-building strategies that fit your life.
- 💡 Takes just 5 minutes
- 📊 Tailored results based on your answers
- 🔒 No credit check required
Need a Pre-Approval Letter—Fast?
Buying a home soon? Complete our short form and we’ll connect you with the best loan options for your target property and financial situation—fast.
- 💡 Only 2 minutes to complete
- 📊 Quick turnaround on pre-approval
- 🔒 No credit score impact
Got a Few Questions First?
Let’s talk it through. Book a call and one of our friendly advisors will be in touch to guide you personally.
Schedule a CallImportant Disclaimer
This calculator is for illustrative purposes only and does not constitute financial, legal, or investment advice. Results are based on general assumptions and may not reflect actual performance or eligibility. This is not a loan estimate or approval. Please consult with a licensed mortgage advisor before making financial decisions.
