Can You Get a Mortgage on a Life Lease?
If you’re aged 55+ and thinking about moving into a life lease community, you’re likely feeling a mix of excitement and curiosity.
Life lease living offers comfort, convenience, and a strong sense of community, but it can also raise some important questions, especially when it comes to finances. Many models differ dramatically, which add a layer of confusion when beginning your exploration.
One of the most common questions we hear is: “Can you get a mortgage on a life lease?”
It’s a great question — and one worth understanding early in your planning process.
The Short Answer: Traditional mortgages don’t apply to lease units.
Why Mortgages Work Differently in a Life Lease
Unlike purchasing a freehold home or condo, a life lease doesn’t involve owning the unit or the land outright. Instead, you’re purchasing the right to occupy the unit under a lease agreement with the sponsoring organization.
Because there’s no traditional property title involved, banks and conventional lenders typically cannot offer a standard mortgage for a life lease unit. Mortgages require real estate title as security for the loan, and life leases simply fall outside of that traditional ownership model.
While the experience of moving into a life lease community feels very similar to “buying,” the financial side of things works differently behind the scenes.
How the Financials Work in a Life Lease
In most life lease communities, payment is made in full at closing, with an initial deposit due when you sign your life lease agreement. At The Village, that deposit is applied toward your final payment at closing.
Because there’s no monthly mortgage payment like there is with a traditional home purchase, it’s important to have a clear financial plan in place, especially if the sale of your current home will fund your life lease purchase
Learn more about how our specific life lease model works on our detailed blog here!
What Are Your Options?
When exploring 55+ communities, there are generally two paths: renting or choosing a life lease “purchase.”
One of the advantages of our life lease model is that residents share in the appreciation of the unit over time, while also enjoying lower monthly costs compared to many other rental housing options. The monthly fee at the Village when living in Life Lease supports your access to amenities, services, and a vibrant community designed to help you age well, stay active, and live independently for as long as possible. It is very similar to that of a “condo fee”.
And while traditional mortgages aren’t an option for life lease units, there are practical ways to make the timing work.
A Few Helpful Tips as You Explore Life Lease Living
If you’re thinking about moving into a Life Lease community, you may be wondering how the process works—especially when it comes to timing and finances. You’re not alone! One option many adults 55+ find helpful is bridge financing.
What Is Bridge Financing?
Bridge financing is a short-term loan that helps cover the gap between selling your current home and paying for your life lease unit.
It can be a great option if:
Your home is sold, but the closing date is after your life lease move-in date
You need access to funds before your home sale is finalize
You have money available, but it’s tied up in investments or other assets you’d prefer not to access right away
Bridge financing is usually arranged through your bank or financial institution and is typically secured against your current home or other assets. The good news? It’s designed to be temporary and is often paid back as soon as your home sale closes.
Think About What Works Best for You, Now and in the Future
A little planning up front can go a long way and help make your transition smoother and less stressful:
Talk to your financial advisor early
They can help you understand your options, explore timelines, and decide if bridge financing makes sense for you.Try to line up closing dates when possible
Coordinating the sale of your home with your life lease possession date can reduce—or even eliminate—the need for short-term financing.Talk to your Life Lease provider
Our team at Luther Village on the Park is always happy to help. We’re here to answer questions, walk you through the process, and share helpful insights along the way. We will always make recommendations around if this is the best next steps or if other options are.
We always want to learn about your unique situation and then explore what makes the most sense for you long-term.
You don’t have to navigate this next chapter alone, even if you are not ready to make a move our team is happy to be or resource and support you along the way!
Check out our current Life Lease listings here or connect with us today to see if Life Lease is right for you!