A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is designed for seniors 62 and over as a safe and secure financial tool for retirement.

For the majority of seasoned individuals, keeping up with inflation, raising families or funding college superseded saving for their retirement.  According to the Government Accountability Office, approximately 29% of the American households (with folks aged 55 and over) have no retirement savings account and will retire without income from a pension.  This is especially troublesome, as many financial advisors suggest having 9 to 11 times your annual salary in your retirement fund to ensure your ability to maintain the lifestyle you are currently living throughout your retirement. 

A reverse mortgage may offer a lifeline to those who find themselves behind in their retirement savings.

Quick facts:

• Borrowers must be 62 or older (Non-borrowing spouses may be under the age of 62 unless property is in Texas).
• Reverse Mortgages are only available on primary residences.
• One to four-family residences are acceptable
• As a rule of thumb, you need 50% equity in your home. The older your age, the more for which you may qualify (Speak with a Licensed Reverse Mortgage Loan Originator to see if you qualify).
• You can choose to receive your reverse mortgage funds all at once, as a lump sum, fixed monthly payments (either for a set term or for as long as you live in the home), as a line of credit, or a combination of these.
• The funds you receive from a HECM can be used any way you see fit after you pay off the balance of your current mortgage if you have one and other fees.
• You must receive counseling from a Department of Housing Urban Development (HUD) approved counselor.
• Your responsibility is to maintain your home in good condition, paying property taxes and homeowners insurance in a timely manner.
• You must take a financial assessment, which will look at your income and credit history. Based on the results of this assessment, some of the loan’s proceeds may be set aside to pay for property taxes and insurance.
• The loan becomes due when the last borrower or non-borrowing spouse leaves the property or passes away or should you falter on your responsibilities.
• HECM Reverse Mortgages are non-recourse loans. This means neither you nor your heirs will ever owe more than the value of your home when the loan becomes due and the home is sold.
• Condominiums and manufactured homes meeting FHA qualifications may also qualify for HECMs.
• You must not have any delinquent student loans / federal loans.
• The US government does not originate reverse mortgages. The government insures HECMs, which protects you and the lender, but it is not a lender. You will be working with a private company.

You have worked hard and earned the right to enjoy retirement on your terms, free from financial stress. Let a licensed reverse mortgage loan originator assist you in determining whether a reverse mortgage is the right program to help you live the retirement of your dreams!