A Reverse Mortgage/HECM product is a government loan insured by the Federal Housing Administration (FHA) and is available to homeowners or homebuyers who are 62 years of age or older. By accessing your home’s equity, the loan doesn’t require a monthly mortgage payment comprised of principal and interest and can help free up cash for a variety of financial needs. Some of the features of this loan are:
- The loan-to-value calculation is based on current interest rates, age of the youngest borrower and the appraised value of the home you are financing.
- Borrower(s) must occupy the home, continue to pay their own property taxes and insurance and maintain the home according to FHA requirements. As long as you live in your home, you won’t have to make a mortgage payment (principal and interest) unless you want to do so.
- You retain title to your home until you decide to sell and you can never owe more than the selling price of the home at the time the loan is repaid. This is a non-recourse loan.
- When the loan is due, your heirs have choices – they can repay the loan and keep the home, or sell the home and repay the loan.
- Closing costs and fees incurred are typically financed as part of the loan.
- The loan proceeds can be used to supplement retirement income, cover daily living expenses, repair or modify your home, pay for health care, pay off existing debts, buy a new car, take a “dream” vacation, or pay property taxes.
Reverse Mortgage Loan Products
- HECM Adjustable-Rate
- Jumbo Reverse Mortgage (not available in all states)
- HECM to HECM
- HECM for Purchase Product
Contact your local loan consultant for more details about whether a reverse mortgage is right for you.