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Reverse Mortgage

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What is a HECM Reverse Mortgage? 

Home Equity Conversion Mortgages (HECMs) are also known as Reverse Mortgages. Reverse Mortgages are designed to help Americans age 62 and older to convert a portion of their home equity into tax-free money. These loans are insured by the Federal Housing Administration (FHA) and helps Seniors to live comfortably and achieve retirement security.

How does the process work?

A reverse mortgage loan allows you to turn a portion of your home equity into cash to improve your lifestyle by your own means. You get to continue to live in your home, retain its ownership and are not required to make any mortgage payments during the loan period. Instead of paying the loan monthly, the loan balance is repaid when all borrowers have left the home. The amount of tax-free money you receive is based on current interest rates, the age of the youngest borrower and your home appraised value.

5 Advantages of HECM Reverse Mortgages:

  • No monthly mortgage payments: HECM loans are paid back when a homeowner leaves the house, so there’s no monthly payment.
  • Tax-free proceeds: Since this is a loan and not income, HECM borrowers don’t pay taxes on the money they get from the HECM loan.
  • Homeowners can stay in the home: HECM loans are a great way to use the cash invested in a home over years of home ownership, without having to sell the home.
  • FHA insured: HECM loans are insured by the Federal Housing Authority, if the home’s value falls, FHA insurance means that borrower never owes more than value of the loan, even if the loan balance is higher than the equity in the home.

Check out this video on the Reverse Mortgage Program as shown on Fox Business HERE

Want more information on the benefits and drawbacks of reverse mortgages? You can request for more information below and we'll be glad to educate you!

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