How would you like to pay off existing loans, pull out cash up to 50% of the value of your property and

HECMs (Home Equity Conversion Mortgages or Reverse Mortgages) have come a long way since 2008. They are now heavily mandated by the Federal Housing Administration which added rules to protect the consumer, and to give them an independent, non-biased source of information about reverse mortgages, prior to allowing a consumer to apply for one.

Start with a HECM certificate
The FHA appointed several independent companies across the US that provide a certificate which allows you to apply for a Reverse Mortgage. They have a session with you, in person or over the phone, to explain in detail how Reverse Mortgages work, what to expect and to answer any questions you might have. When done, they will email you a HECM Certificate. You need to send a lender a signed copy of that to begin a HECM loan.

How Does a Reverse Mortgage Work?
Reverse mortgages are similar to Forward Mortgages (a standard Conventional, FHA or VA loan) but instead of you paying a lender monthly to pay for a mortgage, the lender takes the payment from the equity within the property. You need about 50% equity to qualify, and most programs require the borrower, or at least one person of a married couple to be 62 years old, but now there are specialty programs that will qualify someone as young as 55.

Can I Take Cash Out of the Equity?
You could also receive cash from the property depending on your equity. The best part is, whether paying off an existing loan and/or taking cash from your homes equity, you never make a payment! Even if all the equity is used up, you will never have to make a payment. You are required to keep paying your homeowner’s insurance and property taxes, and maintain your property but that’s all.

Do I Still Own My Property?
Absolutely, you still own the property so you can still sell it, will it to your heirs, charity, etc. just like any property with a normal mortgage. And generally the equity that you start with tracks to a certain extent over the years, remaining close to what it was when you started. For instance, if you had a $1,000,000 property with a $500,000 reverse mortgage, you start with $500,000 in remaining equity. As time passes, the lender draws its monthly payment from that equity so it is reduced, but at the same time, relative to inflation, home values generally increase over time. So say equity is reduced by $300,000 over ten years, but with inflation the value of the home is now $1,300,000, your net equity of $500,000 would remain (obviously the scenario may greatly vary based on inflation and the loan rate).

You earned the equity in your home over the years. Why struggle if you have that equity and can live more comfortably, still leaving an inheritance to your heirs. Give us a call. Let’s figure out what the possibilities are together.