Home Equity Conversion Mortgage (HECM), sometimes known as a reverse mortgage, is a special type of home loan that may be available if you are age 62 years or older. It lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. Borrowers can also use a HECM loan to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
Potential HECM borrowers can apply for a reverse mortgage loan through a lender who specializes in HECM loans. As part of the application process, you will be required to receive reverse mortgage counseling from a HECM counselor. The housing counseling staff from NeighborWorks Green Bay can provide this service, which will help potential borrowers determine if a reverse mortgage loan is right for you. The goal is to help you understand your obligations if you apply for and receive a reverse mortgage loan.
The information that you will receive will include:
- A reverse mortgage analysis with breakdown of loan programs • Loan amortization schedule
- Helping you understand reverse mortgages and the appropriateness of a reverse mortgage to meet your needs
- Discuss your financial and other needs for remaining in your home
- Features of a reverse mortgage and how it works
- Your responsibilities with a reverse mortgage
- Impact of a reverse mortgage on you and your heirs
- Help you understand your options and their impact
NeighborWorks Green Bay will only charge a fee for its HECM counseling services if you receive a loan. The fee will be incorporated into the loan. To find out more about receiving counseling for a HECM loan, contact firstname.lastname@example.org or 920-448-3075
The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program, which enables you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more. You can receive additional free information about reverse mortgages in general by contacting the National Council on Aging at (800) 510-0301. It is smart to know more about reverse mortgages, and decide if one is right for you!