Tips on how to use an HECM Reverse Mortgage. The Home Equity Conversion Mortgage (HECM) is the FHA’s reverse mortgage program.
What is a Reverse Mortgage?
A Reverse Mortgage is a program for people at least 62 years of age that currently own their own home and have equity in their home. A reverse mortgage program allows the borrower to take out equity in the form of cash from the lender. Several conditions need to be met in order to qualify for a reverse mortgage.
HECM
The FHA created the Home Equity Conversion Mortgage as the first Reverse Mortgage program offered to consumers. The owner does not have to repay the loan as long as the house they are living in is the primary residence. The FHA also stipulates that the home must be fully paid for or very little left on mortgage so that the house can be paid of with the proceeds of the Reverse Mortgage.
What property is eligible?
Single family homes or a 1 to 4 unit home with one unit occupied by the borrower. A HUD approved condominium and manufactured homes that are FHA approved are also eligible.
How much money can I get?
It depends on your age, the value of your home and the current interest rate. You have several options to receive your money. All of these options specify that you must be living in the house.
Tenure – equal monthly payments for as long as the resident lives in the home
Term – equal monthly payments for a fixed number of months
Line of Credit – unscheduled payments or installments at times and in amounts you request
Modified Tenure – Line of credit and monthly payments
Modified Term – Line of credit and monthly payments for fixed number of months
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