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Home Equity Conversion Mortgage

For those 62 years of age or older, a HECM allows you to convert part of the equity in your home into a non-taxed source of income and avoid any future mortgage payments. Giving you the peace of mind that you can live in your home for life, as long as you continue to pay the property taxes and homeowners insurance.

Home Equity Conversion Mortgage (HECM)

The HECM is a different type of mortgage than what you may have used in the past. This program allows age qualified individuals to access home equity to accomplish a number of goals. These may include supplementing retirement income, reducing housing expenses, providing a financial safety net, or even purchase of new principal residence.

Here are some details about the program:

  • One borrower must be at least 62 years of age at the time of closing.
  • The homeowner(s) retain ownership in the home just as with any other mortgage program.
  • The borrower(s) are not required to make payments toward the balance of the mortgage for the life of the loan.
  • When the last borrower no longer lives in the home, the home can be sold traditionally at fair market value and any equity above the outstanding loan balance will be paid to the borrower(s) or beneficiaries.
  • If there is a situation where the loan balance exceeds the home value at the time of sale, there will be no financial obligation to settle the loan.
Retirement

A home equity conversion mortgage (HECM) can give you peace of mind as you enter retirement by turning your home into a “pension” that provides you with access to tax-free funds to supplement your income or provide emergency funds in case of unforeseen expenses (e.g. medical treatments, home and vehicle repairs, etc.). Additionally, a HECM can even enable you to eliminate your mortgage payments while still having the security that you can live in your home for the rest of your life, as long as you continue to pay your property taxes and homeowners insurance, and maintain the property.

Purchase

If you are looking to “right-size” your home in retirement or simply relocate, but don’t want to invest all of the equity from the sale of your current home or don’t have enough equity to purchase your dream retirement home, a home equity conversion mortgage (HECM) could be the solution for you. Using a HECM for purchase, allows you to invest only about half of the value of the property while also avoiding future mortgage payments, while still having the peace of mind that you can live in the home for life as long as you continue to pay your property taxes and homeowners insurance, and maintain the property.

Refinance

You’ve been paying on your mortgage and building equity in your largest financial asset for years, but you still owe on a first or second mortgage and are thinking about refinancing to reduce your mortgage payments and/or pull out some equity. If so, you should seriously consider an option that provides much more flexibility than a traditional mortgage or home equity loan. A home equity conversion mortgage (HECM) can enable you to pay off your existing mortgages and have access to additional funds, while even eliminating future mortgage payments. In addition to these benefits, you can also have the peace of mind that you can live in your house for the rest of your life, just by ensuring that you pay your property taxes, homeowners insurance and maintain the property.