Many people who are age 62+ with 50% or more equity in their homes do not believe that a HECM reverse mortgage loan is right for them. They are under the impression that this is a loan of last resort and only for those who have exhausted all their other assets.
Wrong and Costly Thinking
Those who believe that HECMs would be a waste of money do not understand how they can be of benefit to them. Consider these facts:
HECMs eliminate mortgage payments, except for taxes, insurance and maintenance and can be used to set up a line of credit, short term payments or tenure payments for as long as the borrower lives in the home. The line of credit option has a growth option (applies to unused funds); short term payments can allow for such potential benefits such as retirement and postponement of Social Security payments; and tenure payments might provide an extra source of cash flow to pay for things such as medical expenses, insurance or long-term care insurance. When structuring the HECM, it can be set up in any combination of these options so that it fits each borrower's needs.
HECMs can also be used to purchase a home, so it may be right for you if you are looking to downsize or right size.
Many are reluctant to treat home equity as they do their other assets. They believe that it is better to draw on money they worked hard to save rather than access the equity in their home. But why not coordinate the use of all your assets and let your investments continue to grow?
Fairway Independent Mortgage Corporation is hosting a workshop at the Castlewood Library 6739 S. Uinta in Centennial at 11:00 a.m. on September 29, 2017. The speaker is Professor Emeritus Sam VanWhy from the College for Financial Planning who will explain the HECM program and why he believes it is a valuable loan product for seniors. Call Paula Hillman, NMLS # 1619813, at 720-544-6309 to RSVP as seating is limited.
Copyright©2017 Fairway Independent Mortgage Corporation ("Fairway") NMLS#2289. 4801 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. All rights reserved. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. The youngest borrower must be at least 62 years old. Monthly reverse mortgage advances may affect eligibility for some other programs. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.