{Case Study} Can Clients “Upsize” with the HECM for Purchase?

Last week, we looked at a case study in which the clients used the HECM for Purchase (H4P) to buy a home of lesser value, but what if they wanted to buy a more expensive home? Would the H4P still be a useful tool? Let’s take a look.

{Case Study} How One Couple Downsized with the HECM for Purchase and Added $226,000 to Savings

Can Clients Buy Their More Expensive Dream Home?

Consider this example: Sam was a retired advisor who sold his practice to his daughter. He decided to sell his home and received $400,000 in proceeds. He wanted to buy a home that cost $500,000. Actually, that was the base model; he and his wife really wanted the $600,000 model. They had a few options:

(1) They could move to a $400,000 same-size home and use all the proceeds from their sale.

(2) They could get the $500,000 house they had originally wanted, use the sale proceeds, and then either take out a $100,000 mortgage or use $100,000 from their savings.

(3) They could get the $600,000 house they really wanted, use all the sale proceeds, and either take out a $200,000 mortgage or move that amount from savings.

(4) They could use the HECM for Purchase (see below) which would make $267,000 available for the house they really wanted. They would have to use $333,000 from their sale proceeds, leaving them with $67,000. They wouldn’t have to take out a mortgage and make payments, and they wouldn’t have to use money from savings.

Which Option Do You Think They Chose?

If you said the last one, utilizing H4P, you would be correct. You can see from the example above that the H4P gave Sam and his wife flexibility. They can move into the more expensive home and still have liberated dollars remaining!

How Do I Have This Conversation with My Clients?

A recent study revealed that more than 50 percent of retirees are open to moving, but many just don’t know how it would be possible.

Do you know how to introduce the H4P option to them? Here are two resources I’ve designed specifically to equip advisors for this conversation.

    Using a simple diagram like the one above can be extremely helpful in enabling clients to picture their Housing Wealth. We are happy to provide these Illustrations for advisors who work with Don and his team. Simply go to and enter the basic client information. Be sure to include the home value they’d like to purchase in the notes!
    If you want to learn the language, questions, concepts and stories to have educated conversations with your clients about the reverse mortgage, then the Housing Wealth Certificate Course is for you. I’ve even created a H4P script to use as a prompt in client meetings. This conversation is a real game-changer.

Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®
Don Graves, RICP® is a Retirement Income Certified Professional and one of the Nation’s Leading Educators on the Emerging Role of Reverse Mortgages in Retirement Income Planning. He is president and founder of the HECM Institute for Housing Wealth Studies and an adjunct professor of Retirement Income at The American College of Financial Services. He has helped tens of thousands of Advisors as well as more than 3,000 personal clients since the year 2000
Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®
Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®

Categories: Uncategorized


Leave a Comment

%d bloggers like this: