Cliff AuerswaldPresident, All Reverse Mortgage, Inc. · President at All Reverse Mortgage, Inc. (ARLO™) NMLS#14041 Company NMLS #13999

HECM Purchase - How is the Down Payment Calculated?

22 Dec 2023 · 1 min

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1:00

In this segment, the speaker explains how the down payment for a Home Equity Conversion Mortgage (HECM) purchase is determined. The calculation relies on FHA loan‑to‑value (LTV) tables that factor in the youngest borrower’s age and current interest rates. A sliding scale is used, typically requiring about 70% down for a 62‑year‑old borrower and as low as 40% down for borrowers in their 80s. The quoted down payment figure is a net amount that already includes upfront mortgage insurance, origination fees, and other costs. The speaker also promotes a free reverse‑for‑purchase calculator on their website, which lets users input age, sales price, and state to obtain a down‑payment quote without contacting sales representatives.

Chapters

We have a reverse for purchase calculator that's free on our website. So the down payment is factored based on those loan-to-value tables. So FHA created that table, which is based on your age of the youngest borrower and current interest rates. That's when you have to really look to each individual lender when you're getting a quote. The sliding scale is typically much as 70% down if you're just 62 years old, as little as 40% down if you're in your 80s. That number, by the way, is today, all costs included, including the upfront mortgage insurance, origination fees, all of that would be a net figure. But we have a reverse for purchase calculator that's free. You could run it all day long on different scenarios on our website. You just put in an age and a sales price in the state, and you can get a down payment quote without any interactions with, you know, sales guys or anything like that. We have a lot of those different calculator tools available on our