Home Equity Conversion Mortgage HECM

Home Equity Conversion Mortgage (HECM) 255

The Home Equity Conversion Mortgage; The HECM is a Reverse mortgage from FHA. This type of mortgage is for borrowers that are over 62 years of age, and own a home. Its like a refinance only thing is you would not be making payments; the lender would be making payments to you.

This type of mortgage offers to the older borrower the ability to stay in their home and draw out the equity they have in their home in a variety of ways; one being a monthly payment from the lender to the borrower. Giving the older borrower the opportunity to stay in their home and boost their income; when typically its time in their lives, when they have less income due to age.

There are 5 payment options:

  1. TENURE: This is were the borrower receives monthly payments from the lender for as long as the borrower lives and continues to live in the home as their principle residents.
  2. TERM: This is were the borrower receives monthly payments from the lender for a fixed period; that is selected by the borrower.
  3. LINE OF CREDIT: This is were the borrower can draw off the equity at will; make withdrawals, up to the maximum amount. However and whenever the borrower chooses, and in amounts of your choice.
  4. MODIFIED TENURE: This is were the borrower receives monthly payments from the lender for as long as the borrower lives and continues to live in the home as their principle residents. As well the borrower can draw off the equity at will; make withdrawals, up to the maximum amount. However and whenever the borrower chooses, and in amounts of your choice. In other words TENURE is combined with LINE OF CREDIT.
  5. MODIFIED TERM: This is were the borrower receives monthly payments from the lender for a fixed period; that is selected by the borrower. As well the borrower can draw off the equity at will; make withdrawals, up to the maximum amount. However and whenever the borrower chooses, and in amounts of your choice. In other words TERM is combined with LINE OF CREDIT.

With this type of mortgage the borrower retains ownership of their home, and may sell and move at anytime, you may keep the proceeds in excess of the mortgage balance. You can not be force to sell your home to pay off the mortgage balance, even if the balance grows to exceed the value of the home.

With a FHA insured Reverse mortgage you need not repay until the borrower sells, moves or dies. When that time comes, and the loan is due, if the loan exceeds the value of the home; the borrower or the heirs will owe no more than the value of the property.

The Eligibility for this loan is only that All borrowers must be at lest 62 years old and any existing liens on the property must be small enough to be paid off at settlement of the reverse mortgage.

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