HECM REVERSE MORTGAGES
Stay in your home, reduce monthly payments, and free up cash!
Why choose a HECM reverse mortgage?
Reduce or eliminate your mortgage payment: Reverse mortgages allow homeowners to stay in their home without worrying about a monthly mortgage payment. They only need to follow the loan’s terms and pay their other payment obligations such as property taxes, homeowners insurance and maintenance.*
Supplement income: You can receive tax-free¹ cash from the equity in your home. There are no restrictions on how you can use your home equity cash!
Options for your Equity: HECM reverse mortgages allow you to receive your home equity funds in a method that works for you. You can receive structured payments, reserve your funds in a line of credit, or work with us to find a custom solution that works for you!
- Monthly: These structured payments are called Term or Tenure payments²
- Line of Credit: Instead of receiving a cash payment, your home equity funds are stored away so you can use what you need, when you need it. You will also accrue interest on the funds in your reserve, so your funds can grow over time.
- Lump Sum: If you choose a fixed interest rate for your reverse mortgage, you can have your funds dispersed in full at closing. This payment method is also possible with an EquityPower reverse mortgage.
HECM REVERSE MORTGAGE
HECM stands for Home Equity Conversion Mortgage. This program was designed for homeowners aged 62 and older who are looking to free up cash or reduce their monthly expenses. When you take out a HECM reverse mortgage, your existing mortgage will be paid off and you will receive the cash you are entitled to! There are a number of factors that determine how much cash you will receive, which you can read more about here.
HECM REVERSE MORTGAGE FEATURES
- For homeowners at least 62 years old
- Access tax-free cash from your home equity
- No monthly mortgage payment required! You only need to follow the loan’s terms and pay your other payment obligations such as property taxes, homeowners insurance and maintenance.*
- Retain full ownership of your home
- Use loan proceeds however you’d like
HECM Reverse Mortgage FAQ’s
Find answers to some of the most common questions about HECM reverse mortgage loans.
Can I still make monthly payments?
Absolutely! Many reverse mortgage borrowers choose to continue making payments to lower their loan balance, just like a traditional mortgage. A reverse mortgage allows homeowners the option to make monthly payments to avoid any stress if you can’t pay your mortgage payment. Just like a traditional mortgage, you still pay separate property taxes and insurance.
Will I still own my home? Will my family still inherit my home?
Yes. This is the most common misconception about reverse mortgages. The purpose of any mortgage, including a reverse mortgage, is to facilitate homeownership. You only need to follow the loans terms and make your other payment obligations. Your heirs will still inherit your home. Just like if you had a traditional mortgage, they can sell the home and keep the equity, or take on a new mortgage to keep your home in the family.
Does a reverse mortgage affect the other assets in my estate?
Your estate, including financial assets, possessions and additional property, are not affected by your reverse mortgage whatsoever.
What exactly are “equity funds” from a reverse mortgage?
One of the primary features of a reverse mortgage is the ability to convert a portion of your home’s equity into tax-free1 cash. The amount of money you can access is based on three factors: your age, your interest rate, and the value of your home. Your age and interest rate generate a percentage, which is then applied to your home’s value. After any lien payoffs (like your existing mortgage) and loan costs are deducted, you receive your equity funds!
Equity funds can be disbursed through a line of credit, monthly installments, or a lump sum, depending on which reverse mortgage product you choose. You can also refinance your reverse mortgage! As your home value goes up, and you get older, your percentage increases, making more money available to you.
Our borrowers use their home equity funds in many ways! Among the most common are paying off credit card debt, upgrading their home or doing home modifications, purchasing a vacation home or investment property, traveling, starting a college fund for grandchildren, paying for a child’s wedding, and starting a small business. However, these funds can simply be kept as a safety net or used as cash each month.