HECM Reverse Mortgages

What is a HECM Reverse Mortgage

The term HECM stands for Home Equity Conversion Mortgage and the HECM is the most popular reverse mortgage offered. There are other reverse mortgages available and we can assist you with those as well, but we are dedicated helping you understand the details of the HECM loan in particular.

How Much Cash Can I Get?

That depends on several factors, but be certain that we will get you the absolute largest amount of funds for your home. Contact Us for more details, or read on while we cover HECM reverse mortgage rules, guidelines, and additional HECM information. We will also share recent developments regarding The HECM Home Purchase Program. Be assured that the HECM reverse mortgage is a safe, government insured mortgage product. It was designed especially for retirement age seniors. Although a reverse mortgage may not be right for every individual, or every circumstance, there is a good chance that it will work for you. It can provide an additional source of income in this turbulent economy. At any time during reviewing this information, feel free to Contact Us with any questions.

How a HECM Reverse Mortgage Works

If you're at least 62 years of age, a reverse mortgage could be an effective way for you to use your home to get the funds you need. Reverse mortgages are unique and often misunderstood. As you learn about their advantages throughout this website, please keep three things in mind. As long as all property tax, insurance and maintenance requirements are met:

You cannot owe more than the value of the home

You keep the title to your property

You receive payments instead of making them

A HECM reverse mortgage pays money to you, as though you had sold your house. In this regard it acts like a typical home equity loan. You can receive monthly payments or a lump-sum payout based on the value of your house. In addition, you won't have to move or even give up ownership to the home. The house remains yours, just as it is today, with your name on the title. Although this type of loan is still a little misunderstood, we hope to help in clearing up some of that confusion. First, let's see why you may want to consider this type of loan. There are several benefits to a HECM reverse mortgage, please see below:

The money you receive is tax free income

No payments as long as you live in the home

No credit or income requirements

Reverse mortgages are supported by AARP

Reverse mortgages are insured by the FHA

More Information on HECM Reverse Mortgages

One question we get asked most is why do they call this product a "reverse" mortgage? To answer that, a HECM reverse mortgage is a loan whose features make it essentially the reverse of a traditional "forward" mortgage. Instead of paying your lender, your lender pays you. Instead of reducing your debt as the loan term progresses, you increase it. In addition, instead of turning your income into equity, you turn your equity into income. The ability to turn your equity into income is what sets the HECM reverse mortgage apart from other loans. It's also why the loan is so appealing to retirement age seniors. Having spent years repaying the mortgage that allowed you to buy your home, you can now draw upon that equity to help you with your retirement goals. You can use the loan funds for any purpose you choose.

Travel
Medical Expenses
Home Improvements

More Comfortable Retirement

You still own the home and you remain the owner for as long as you live there. Until you sell or move, you retain the title to your home. Unlike a traditional mortgage, however, your balance cannot exceed the value of your home when you sell it. So no matter how much money you receive through your reverse mortgage, you will never owe more than your home is worth. Having that assurance is important. After all, you've put a lot of money into your home, and you should have control of that investment.

Who Can Get a HECM Reverse Mortgage?

To be eligible for a reverse mortgage, all owners listed on the home's title must be at least 62 years of age and occupy the home as their principal residence for the majority of the year. The property must be a single-family or a two-to-four unit dwelling. Town homes, detached homes, condominium units, planned unit developments (PUDs), and some manufactured homes are also eligible. Speaking with an approved reverse mortgage counselor is another important eligibility requirement. The Department of Housing and Urban Development (HUD) supervises counseling agencies that can work with you in person or, more commonly, over the phone. Contact Us for counseling details.

The Problem: House Rich and Cash Poor

The problem for many Americans, especially those of retirement age, is being "House Rich and Cash Poor." What does this mean exactly? It means that you hold a tremendous amount of equity in your home, sometimes several hundred thousand dollars worth, yet you may still be struggling financially. You have worked hard over the years and have paid off, or nearly paid off your mortgage but your retirement income is less than adequate. You may need just a little extra to get by each month.

One Possible Solution: The HECM Reverse Mortgage

The monthly payments you made during the life of your original mortgage served to decrease your debt and increase your equity. The payments you receive with a reverse mortgage have the opposite effect, they increase your debt and decrease your equity. "Why would I increase my debt?" you might ask. The short answer is this: Because you do not have to pay this money back. Not in your lifetime anyway. And not so long as you own the home. That's why a reverse mortgage is considered by many a life saver. The HECM reverse mortgage represents a source of tax free income, with no payments needed to repay the loan. Of course it is a loan, and it does not to be paid back, but that can happen at the time of your death, from the proceeds from selling the home. If you are concerned with how this will effect Heirs of Your Estate, how much money will be left after the loan is paid, or if you have other HECM reverse mortgage questions, please let us know.

We intend this site to be a resource of information for the HECM reverse mortgage and we have created pages to answer questions regarding HECM Rates, the HECM Payments that you can expect to receive, as well as HECM Fees associated with the loan. If you decide that this type of loan is for you, then we are offering a rebate worth $400.00 towards the home's appraisal. Please Contact Us for details.