A reverse mortgage is a loan that lets older homeowners tap into their net worth by converting part of their home’s equity into cash.
Here are the basics you need to know about reverse mortgages:
FHA, who insures the reverse mortgage for the benefit of the borrower, calls reverse mortgages a “Home Equity Conversion Mortgage” or HECM.
The reverse mortgage was conceived to help retirees improve their quality of life by utilizing the accumulated equity in their homes. The tax-free proceeds may be used to cover living expenses, pay for long-term health care, pay off an existing mortgage or even take a trip around the world! In fact, there are no restrictions on how to use the proceeds of an HECM… the money is yours to do whatever you want!
An HECM loan is called a “reverse mortgage” because, unlike traditional mortgages, instead of making payments to a lender, the borrower makes no payments and the lender makes payments to the borrower.
The HECM also has many varied options the borrower can take advantage of. Contact us to learn which advantages might apply to you.
The qualifications for a reverse mortgage are simple:
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