Home equity conversion mortgages explained
One way to access additional funds during retirement is through a home equity conversion mortgage (HECM), which allows you to tap into the equity you've built up in your home. You may hear these mortgages referred to as a reverse mortgage, though a HECM is not the only type of reverse mortgage.
Essentially, a HECM is a loan that utilizes the equity in your home, and the lender pays you based on that equity. This flips the roles of the lender and the borrower. HECMs are specialized financial tools designed specifically for seniors who may need extra money to cover their expenses. However, there are certain criteria you must meet to qualify for a FHA HECM. You must:
- Be at least 62 years old
- Own 60% or more of your home’s equity, in most cases
- Apply for a reverse mortgage using your primary residence
Want to find out how much equity you have in your home? Talk to one of our HECM experts and find out in as few as five minutes.
Here’s a handy infographic that explains how HECMs work:
If you’re interested in learning more about HECMs work and to calculate how much you or a loved one could qualify for, get in touch with us today.
Disclaimer:
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 Reverse Mortgage counselor near you, search the HECM Counselor Roster at https://entp.hud.gov/idapp/html/hecm_agency_look.cfm