Picture this: a financial tool tailored for homeowners, turning equity in your cherished home into a dependable cash source. This is the Reverse Mortgage, a unique twist on the traditional mortgage. Instead of you paying a mortgage, this innovative product pays you, offering a fresh approach to managing your finances. You'll receive regular payments, establish lines of credit, or even obtain a substantial lump sum, all from the comfort of your own home. The most popular version of this is the 'Home Equity Conversion Mortgage' or HECM. Your home, a symbol of your hard work and family memories, now also serves as a tool for financial stability. Use a Reverse Mortgage for home maintenance, improvements or even toward the dream of a new home. Embrace the concept of a Reverse Mortgage, and welcome to a future filled with possibilities.
Continue reading to learn more about your options, or contact a reverse mortgage and HECM pro today to get started!
Get access to my home equity with no monthly principal & interest mortgage payment.**
Call 844-4GR-HECM 7am - 8pm CST
Get access to my home equity with no monthly principal & interest mortgage payment.**
Call 844-4GR-HECM
7am - 8pm CST
What are the facts on Reverse Mortgages &
Home Equity Conversion Mortgages?
Run your numbers to see how much you qualify for in as few as 5 mins and fund the retirement you’ve worked hard to achieve.
Borrowers have responsibilities such as property upkeep, property tax, and homeowner's insurance.
While all HECMs are reverse mortgages, the opposite is not true - not all reverse mortgages are HECMs. The specific differences between these two terms will be further elaborated.
Misconceptions and misunderstandings exist around these loans, but recent updates to rules and regulations provide enhanced protection for borrowers.
No monthly principal & interest mortgage payment*
Eliminate your monthly principal & interest mortgage payment for as long as one of the borrowers live in the home. You do not need a present mortgage to qualify.
Stay in your home
You live in the house as your primary residence for as long as you like or are able to. You still pay your property taxes, insurance, and other property charges, as well as maintain the home.
Line of credit options available**
Access your home equity whenever you need it with a line of credit that can grow over time with an ever-increasing credit limit.
No monthly principal & interest mortgage payment*
Eliminate your monthly principal & interest mortgage payment for as long as one of the borrowers live in the home. You do not need a present mortgage to qualify.
Stay in your home
You live in the house as your primary residence for as long as you like or are able to. You still pay your property taxes, insurance, and other property charges, as well as maintain the home.
Line of credit options available**
Access your home equity whenever you need it with a line of credit that can grow over time with an ever-increasing credit limit.
What’s the Difference Between a HECM & Reverse Mortgage?
The term "HECM" refers to a specific type of reverse mortgage that is insured by the FHA, while "reverse mortgage" is a broader category that includes various types of loans that allow homeowners to convert home equity into useable funds for any purpose without monthly payments.
HECMs are regulated and insured by the FHA, while other reverse mortgages may be offered by private lenders and not backed by the FHA.
HECM Type | Who is it for? | What does it do? | What are the benefits? |
Traditional HECM | Current homeowners or those with an existing conventional mortgage and/or home equity loan |
Those 62 and older can utilize a reverse mortgage for a new home purchase without the requirement for monthly payments |
Available for homeowners with an existing HECM |
HECM for purchase | Allows borrowers to refinance their current mortgage into a new HECM loan |
Helps retirees to move to a better-suited home by leveraging the sale of their current property and combining it with a reverse mortgage loan |
Allows HECM borrowers to refinance their current reverse mortgage into a new HECM loan |
HECM to HECM Refi | Eliminates the monthly principal and interest payment Increase monthly cash flow |
Monthly mortgage payments are not required The loan is repaid when the home is sold, the homeowner moves out, or passes away |
Potentially lower costs and increase available funds. |
Jumbo / Portfolio Reverse Mortgage |
For homeowners with high- value properties that exceed the FHA loan limits of traditional HECMs |
Allows some homeowners to access a larger portion of their home equity |
Helps homeowners access larger sums of money |
A licensed loan officer will assess your individual needs and share the benefits of a HECM or reverse mortgage with you.
HECM or reverse mortgage applicants are required to undergo independent counseling to ensure that they fully understand their financial decision.
An expert loan officer will be by your side to let you know exactly which supporting financial documents you’ll need to provide.
A home appraisal will be scheduled to determine your property’s value and ensure your home is in a livable condition.
It’s time to sign the final documents.
**This is not a commitment to lend. The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid. Otherwise, the loan must be repaid when the last borrower passes away or sells the home. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. This material has not been reviewed, approved or issued by HUD, FHA or any government agency. Rate, Inc. is not affiliated with or acting on behalf of or at the direction of HUD, FHA or any other government agency. To find a HECM Mortgage counselor near you, search the HECM Counselor Roster at https://entp.hud.gov/idapp/html/hecm_agency_look.cfm or call (800) 569-4287.
***If part of your loan is held in a line of credit upon which you may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
When the loan is due and payable, some or all of the equity in the property that is the subject of the HECM mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.
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