Retirement isn’t a luxury for everyone, and many retirees find that down the road they could use some financial assistance. When you are unable to work at an older age or can’t find alternative means of income, an HECM could be an option for you. Reverse mortgages are becoming more common, but the most secure on the market is an HECM.
What Are HECMs?
A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage, which is a mortgage supported and regulated by the U.S. Department of Housing and Urban Development. These types of reverse mortgages can be used for any purpose that you require, such as home improvement expenses, medical expenses, or other basic living expenses.
Eligibility
There are several factors that determine your eligibility for an HECM: your age, the appraisal value of your home, the type of mortgage you select, and current interest rates. In terms of your age, you and any co-owner of your home must be above the age of 62 in order to be eligible for an HECM. If one of you meets this qualification, the other could be removed from ownership of the house to be approved for the loan.
If you are applying for either the proprietary reverse mortgage or an HECM, you must consult a counselor from an independent, government-approved housing counseling agency. This counselor will explain the loan’s financial implications and costs, as well as explain alternative options to these types of mortgages.
Many Payment Options
The number and flexibility of HECM payment options are a positive. With more than four options, an HECM can provide you the financial relief you may need in a way that you can manage and work with. Here is a list of different payment opportunities:
• Line of Credit – a standby line of credit that borrowers can access only when they need the funds.
• Term Payment – fixed monthly payments for a specified amount of time. The monthly amount received will not change over this fixed time, even if your estate’s value decreases over time.
• Tenure Payment – fixed monthly payments for as long as you live in your home. The payments will only stop when you leave your home, or you pass away.
• Lump Sum – one full payment that is of lesser value than what you may qualify for.Longbridge-financial.com
• Or modifications of any of these methods
Reverse mortgages are an option for long-term financial security in your elderly years, so do some investigating to see if there’s an HECM for purchase near you!
