Is a Reverse Mortgage or Home Equity Conversion Mortgage (HECM) right for you?
Reverse mortgages are a unique type of loan that lets you convert the accrued equity of your home into usable funds.
Home Equity Conversion Mortgages (or HECMs) are a reverse mortgage insured by the Federal Housing Administration (FHA) under the U.S. Department of Housing and Urban Development. Because HECM reverse mortgages are regulated by the government, they are subject to specific rules and limits, many of which are designed to protect the borrower, such as counseling, financial assessment and more.
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A Reverse Mortgage Can Be A Golden Opportunity – And Assist With:
Healthcare costs | No monthly mortgage payments
Home improvement | Supplemental funds
Life's extras | Help for family members
What is a Reverse Mortgage?
A reverse mortgage enables homeowners 62 & older to convert home equity into tax-free cash without selling their home. A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.
However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing
You do not give up title to your home.
- You make no monthly mortgage payments as long as you occupy your home as your primary residence, maintain your property, and remain current on the property taxes, homeowners insurance and HOA dues.
- No prepayment penalties.
- Although the loan is not due and payable until you permanently move out of the home, it can be paid off at any point without prepayment penalties.
- There is no time limit to how long the homeowner(s) may remain in the property. As long as one or both homeowners remain in the home as the primary residence and remain current on the property taxes, homeowners insurance and HOA dues, neither you nor your spouse will be required to leave or sell the home.
- Your home does not need to be free and clear. Elimination of the current mortgage is one of the most common reasons seniors apply for a reverse mortgage.
- You, or your heirs, retain 100% of the remaining equity upon the sale of the home.