Reverse Mortgage HECM, What is it really?

Reverse Mortgage HECM, What is it really?

Reverse Mortgage HECM
 

Reverse Mortgage HECM

A reverse mortgage is a loan available to seniors over the age of 62 which allows them to convert equity in their home into cash. These loans were created to give seniors access to cash for expenses such as home improvements, unexpected medical costs, and in-home care by utilizing the accumulated equity in their homes.

This type of loan is called a reverse mortgage HECM because instead of the borrower making monthly payments to their lender as they would with a traditional mortgage, the lender makes payments to the borrower. Unlike a traditional home equity loan or second mortgage, a reverse mortgage HECM does not have to be repaid until the borrower no longer occupies the home as their primary residence or fails to meet the other obligations of the loan.

The most common reverse mortgage is the Home Equity Conversion Mortgage (HECM) which is insured by the FHA. To learn more about them, watch our video HERE. An alternative option are proprietary Reverse Mortgages which are not backed by the federal government and are not considered HECM loans because of the proprietary nature. For more info about our proprietary programs CLICK HERE

HECM vs. a traditional mortgage

With a traditional mortgage or home equity loan, you borrow a large amount of money and are obligated to make monthly payments. You must also have the income and credit to qualify. With a reverse mortgage, there are minimal qualifications and no monthly mortgage payments to make. As a consumer protection, borrowers have to prove they can maintain their property taxes and home owners insurance. With a reverse mortgage, there is also a line of credit feature that grows over time and cannot be frozen; giving you access to your equity tax free, whenever you may need it.

HECM advantages

A HECM loan (reverse mortgage) helps you convert home equity into flexible, tax-free income you can use however you want and:

  • Continue to live in and own the home without having to make monthly mortgage payments
  • Receive funds tax free in a lump sum, monthly payments, a line of credit or a combination; giving you the ability to adjust your payment options to meet your changing needs
  • Repay the loan at any time without penalty
  • HECM loans are not considered income, are not taxed, and will not affect Social Security or Medicare benefits. Consult your local program offices to determine how, or if, monthly HECM loan payments might affect your eligibility for other programs.

Would you like more cash in your pocket? Wondering how much you may qualify for? Call us today at 503-427-1667 or fill out the form on this page for more information.

To learn more check out the HUD website

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Licensing

© 2019 Northwest Reverse Mortgage, LLC NMLS #1834787

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Contact Us

Northwest Reverse Mortgage
10121 SE Sunnyside Rd
Ste 300
Clackamas, OR 97015

Number:
(503) 427-1667

Hours:
MON-FRI 8AM - 5PM

Northwest Reverse Mortgage, LLC. NMLS 183-4787. Equal Housing Lender. Credit on approval. Terms subject to change without notice. Not a commitment to lend. Contents not provided by, or approved by FHA, HUD or any other government agency. All potential tax benefits should be verified with a professional licensed tax advisor. NMLS Consumer Access

At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; the loan balance grows over time and interest is charged on the outstanding balance; the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; interest on a reverse mortgage is not tax deductible until the borrower makes partial or full re-payment.