The new name for reverse mortgage is the Home Equity Conversion Mortgage (HECM). It is the only reverse mortgage program that is insured by the U.S Federal Government. The HECM allows homeowners to convert a percentage of their home equity into cash without having to sell their home or make any monthly payments. Here are some important points to keep in mind when considering a Home Equity Conversion Mortgage:
HECM can only be obtained through an approved FHA lender.
HECM can provide additional retirement income.
HECM does not require monthly repayments.
HECM allows homeowners to stay in their homes until they pass away or sell the property.
HECM must be repaid when the homeowner permanently moves out of the property.
It is important to note that not all borrowers are eligible for HECM and the amount that can be borrowed is based on several factors such as age, interest rate and the appraised value of the home. Working with an experienced FHA lender can help you determine if a HECM is the right option for you. A HECM can be a great financial tool for many homeowners that want to supplement their retirement income, pay for healthcare expenses or just have a more comfortable lifestyle in their golden years.