For many retirees, the dream of downsizing or relocating comes with an unexpected reality check. Housing prices are high, monthly mortgage payments can strain a fixed income, and dipping into retirement savings often feels risky. But for Tom and Sarah, a retired couple ready for a new chapter, the solution came in the form of a lesser-known financing tool designed for homeowners 62 and older.
Real Story: How Tom and Sarah Bought More Home with Less Stress
Tom and Sarah recently sold their longtime family home and walked away with $400,000 in proceeds. They hoped to find a low-maintenance, single-level patio home in a walkable neighborhood. The problem? Homes that checked all their boxes started at $450,000 and went well beyond $600,000 in their preferred community.
They didn’t want to take on a new mortgage with monthly payments. And they weren’t comfortable tapping into their retirement accounts to close the gap.
Their real estate agent recommended looking into a Lifestyle Home Loan, a type of reverse mortgage for purchase insured by the FHA and available to qualified buyers aged 62 and up. With this financing option, they could put down just over $300,000 and purchase a $600,000 home, without a monthly mortgage payment.
They closed with nearly $100,000 in reserves, found a home that truly fit their lifestyle, and kept their retirement plan on track.
Why the Lifestyle Home Loan Worked for Them
This flexible loan option is designed for older buyers who:
- Are retired or on a fixed income
- Prefer not to carry monthly mortgage payments
- Want to use proceeds from a home sale or savings to maximize buying power
- Need to preserve assets for healthcare, travel, or long-term financial goals
With minimal income and credit requirements, the Lifestyle Home Loan can be a powerful option for buyers who don’t qualify for traditional financing. Buyers can use funds from savings, investment accounts, or even gifts from family to meet the down payment requirement.
Learn more about how these loans work from the Consumer Financial Protection Bureau.
Could This Work for You?
If you or your clients are:
- Over age 62
- Planning to right-size in retirement
- Concerned about stretching a fixed income
- Unsure how to compete with rising home prices
…then this loan option could unlock more freedom and flexibility.
According to AARP, reverse mortgage for purchase options are growing in popularity as older homeowners look for smart ways to relocate without sacrificing financial security.
Ready to Learn More?
Whether you are a real estate agent working with 62+ clients or a retiree exploring your next move, understanding this loan product could be a game-changer.
Equal Housing Lender Sample based on borrower age 70 and interest rates as of October 30, 2024. All loans subject to credit approval and property eligibility.
