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FAQ 

What is a HECM?

A HECM, or Home Equity Conversion Mortgage, is a type of reverse mortgage insured by the Federal Housing Administration (FHA). It allows homeowners aged 62 or older to convert a portion of their home’s equity into cash, either as a lump sum, line of credit, or monthly payments.

While there are a few ground rules for qualifying for a HECM like being 62 years old, other items might be more nuanced. To know for sure if you qualify- give us a call today!

Unlike traditional mortgages, with a HECM, you don’t make monthly mortgage payments to the lender. Instead, the loan balance grows over time and is repaid when the borrower no longer lives in the home (e.g., selling the property, moving out, or passing away).

How can a HECM improve retirement finances?

A HECM provides homeowners with extra financial flexibility in retirement, allowing access to funds without the need to sell their home. This can help cover living expenses, medical costs, or other financial needs, providing peace of mind and enhancing financial security.

By using home equity to supplement income, retirees can reduce the need to draw down savings or investments, potentially allowing those assets to grow longer and provide a more stable financial future.

Yes, HECM loans allow for flexible repayment. Borrowers can choose to make payments on the loan balance if they wish, or defer payment until the home is sold or no longer their primary residence. This flexibility enables homeowners to manage their cash flow more effectively in retirement.

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