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Home Equity Conversion Mortgage
One of the most popular reverse mortgages and highly
regulated as part of the U.S Department of Housing and Urban Development; The
Home Equity Conversion Mortgage (HECM) is a federally insured private loan
providing for greater financial security and a sound plan for seniors. HECM is available to those with
single family homes, 1-4 units as long as the borrower occupies one of the
units, manufactured homes built after 1976, condominiums, PUD’s and town homes.
What is a Reverse Mortgage
Unlike a traditional
mortgage that you pay back each month, a reverse mortgage makes payments to you. You can get these payments in a lump
sum, to cover an unexpected bill.
You can get them as regular supplement to your monthly income. Or, you can get them at intervals and
amounts that are best for you.
We secure reverse mortgage loans that require no repayment as long as your home
is your principal residence and your fulfill the borrower’s obligations, such as
continuing to maintain the property and paying off your property taxes and
hazard insurance. You pay the money
back plus interest and other charges when you sell or permanently move out of
your home.
If you pass away, the
loan is due, but the amount due will always be lesser of your loan balance or
the market value of your home. Even
if the amount you borrowed eventually exceeds the value of your home, you or
your heirs will never own more than the value of your home. All proceeds in excess of what you
owe belong to your estate, which means the remaining equity in your home can be
passed on to your heirs.
As you receive your
payments, the amount of cash you have left after selling and paying off the
loan--your equity--generally grows smaller.
But with reverse mortgages you can never owe more than your home’s value
at the time the loan is repaid.
If you own your home
free and clear or if you have very little mortgage principal outstanding, a
reverse mortgage may be a good option for you.
Reverse mortgages are
tax free and paid in several ways:
A single lump sum of cash
Regular monthly payments as
long as at least one borrower lives and occupies your home
Regular monthly payments for
a fixed period of time
A line of credit to be paid
at your discretion
Borrower requirements:
62 years of age or older
Own a property
Occupy the property as
primary residence
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