The HECM, Home Equity Conversion Mortgage, limit was raised to $625,000 in most areas of the United States with a few exceptions.
The HECM Loan Limit
An HECM loan limit was raised over $200,000 for the 2010 year by the national FHA or Federal Housing Authority. This is a guideline for single family dwellings in the continental United States. Some areas of exception to this limit are; Hawaii, Alaska, Guam, and the Virgin Islands due to high construction cost adjustments. Multi family units’ loan limits are higher, and such properties for consideration should be discussed with an approved HECM lender.
HECM Loan
This program was instituted to help older property owners remain in their home while using the equity as supplemental income to pay for living expenses. The choice of equity disbursement is decided by the homeowner in the form of monthly payments, one lump sum, or a line of credit. Seniors age 62 and older who own their home outright, or have a minimal mortgage balance are eligible for an HECM loan. There are no credit or income restrictions, and the closing costs may be financed in the mortgage. Homeowners must use the home as their primary residence and continue to pay the taxes, insurance, and routine maintenance on the property.
HECM, the Senior Assistance Program
Most seniors enter retirement with inadequate funds to keep pace with the high cost of living increases. Living on fixed incomes does not cover health care related expenses that are incurred with aging. Nest eggs can be depleted with one emergency and the homeowners are forced to make decisions involving the sale of their home to raise money during these emotional times. Having an HECM in place offers seniors the financial choice to be prepared for the expected and unexpected events during retirement.
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