What is a “HECM” Reverse Mortgage Loan?
Specifically designed for homeowners aged 62+, a reverse mortgage is a home loan that allows borrowers to convert a portion of the equity they have in their home into cash.
Insured by the Federal Housing Administration (FHA)
Can only get one through an FHA-approved lender
Turn home equity into a retirement income stream
Key benefits of HECM.
Increased monthly cash flow
Unlock and secure cash from a portion of your home equity without incurring income tax* (generally, it won’t affect your Social Security and Basic Medicare benefits). You can use the funds for anything that you want.
*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation
Flexible repayment feature
You have the option to repay as much or as little of the loan balance each month, or you can make no monthly mortgages payments at all. However, you must still maintain the home and pay homeowners insurance and property taxes.
The FHA guarantees no repayment of the loan is required until the last borrower moves out or passes away. When you move out of your home, you or your estate has up to 12 months to repay the loan balance, which is typically achieved by selling the home.
Non-recourse feature
The FHA guarantees that if the balance on the loan exceeds the home value at the time the home is sold, neither you nor your heirs will be responsible for paying the outstanding balance (the FHA will pay it).
If there are excess proceeds from the sale of your home, you (or your heirs) would receive them.
Common uses of Reverse Mortgage.
Discover the Many Ways a Reverse Mortgage Can Help Enhance Your Retirement.
Bridge the Medicare gap from age 62 to 65
Raise funds to purchase a second home
Refinancing your existing mortgage. T&C apply
Debt consolidation
Cover medical expenses
Fund major expenses, such as in-home care or home renovations
Use as a standby line of credit
Supplement cash flow with a steady stream of funds
Several options of disbursement.
Flexible Loan Disbursement Options to Suit Your Unique Retirement Needs.
Combo of monthly payments and a line of credit
A line of credit
Term (set period of time)
Tenure (life of the loan)
Fixed monthly advances
A lump sum payout
Eligibility of HECM.
As a reverse mortgage borrower, you have three main responsibilities:
Remember, if you don’t meet these requirements, you could lose your home to foreclosure.