What is a HECM Reverse Mortgage?
Home equity conversion mortgages, also known as reverse mortgages, were created more than 25 years ago to help Americans age 62 and older convert some of their home equity into tax free money. HECM reverse mortgages are insured by the Federal Housing Administration and allow seniors to age in place and achieve retirement security.
How it works?
A reverse mortgage allows you to turn some of the equity in your home into cash to enhance your lifestyle in any way you choose. You’ll continue to live in your home, own it, and won’t have to make monthly mortgage payments for the term of the loan. Instead of repaying the loan monthly, the loan balance is paid off when all borrowers have left the home. You will have to pay property taxes, home insurance and home maintenance.
How do you qualify?
The title borrower must be 62 years of age or older (a non-borrowing spouse may be under 62). The dwelling must be the principal residence of the borrower. Borrower must own the home (borrower must meet HECM program financial requirements).
How much money can I receive?
The older the borrower, the more funds may be available. The higher the appraised value of the home, the more funds may be available. The lower the interest rate, the more funds may be available to the consumer.
What are common uses for a reverse mortgage?
Pay off an existing mortgage and eliminate monthly mortgage payments. Make retirement savings last longer. Use a “standby” HECM Reverse Mortgage Line of Credit to preserve investment accounts during market downturns or create a safety net for unexpected emergencies, home repairs and healthcare expenses. Supplement your retirement income with monthly payments. Use a HECM for a purchase loan to buy a home that better suits your needs. Support aging-in-place expenses, such as care and home modifications.
What are some of the benefits of a HECM reverse mortgage?
Some of the benefits include no monthly mortgage payment, tax-free proceeds, keeping your home, the loans are federally insured by the US government, and you may wish to delay receiving your Social Security benefits.
What are some safeguards for consumers?
A number of consumer safeguards have been established to protect reverse mortgage borrowers. These protections ensure that lenders like OneTrust Home Loans are doing their job properly and that borrowers and their families have a thorough understanding of how a reverse mortgage works.
The following consumer protections have been instituted for your benefit: no prepayment penalties, non-recourse loans to the extent that you never owe more than the home is worth at the time of loan repayment, all mortgage applicants reverse benefit from independent advice by a third party. before the application fee, HUD set major limits on the amount of money you can borrow in the first year of your loan.
This can ensure that home equity proceeds last longer, financial advisors include the Reverse Mortgage Growing Line of Credit as part of their clients’ long-term retirement planning strategies, helping to extend even more long other investments until retirement, and HECM origination fees are regulated by HUD. Other costs for HECM reverse mortgages may vary by creditor and loan type.
Let us show you how to convert some of your most important asset – your home equity – to fund your retirement needs. Contact Gary Westerman today for a free, in-depth consultation and determine if this product could meet your future needs. For more information, call Gary Westerman today at 501-282-3758 or email Gary at [email protected]