• Absolutely no mortgage payment
• Ability to pay off other debt
• Cover your medical expenses
• Starting or completing home repairs and improvements
• Opportunity to support your family financially
• Overall Improvement in Quality of Life!

The last feature is really the reason people are considering a Home Equity Conversion Mortgage (H.E.C.M.). The H.E.C.M., or Reverse Mortgage, is a loan program that can significantly help people over the age of 62. According to the National Reverse Mortgage Lenders Association (NRMLA), over 300,000 Americans have obtained a reverse mortgage within its 20 year history. However, there are still three major misconceptions:

1. The bank will take my home if I outlive my payment term or pass away – This is false. The lender does not have to be repaid until you have permanently moved from the home. Also, you are able to leave the home to your heirs just like you would in a regular (forward mortgage).
2. I can owe more than what the house is worth – This is a big misconception, and is absolutely false. These loans are non-recourse which means that you can never owe more than what the home is worth. If, by any chance, the loan balance is more than the market value, you (or your heirs) will only be responsible to repay the appraised value.
3. My family and heirs aren’t going to agree with this – This is your financial decision to increase your quality of life, but I recommend that you sit down and have a talk about this with your family and any other trusted advisor. It is very important that they are educated about this program as well.

You can qualify for a reverse mortgage if you are at or over the age of 62, and the home in consideration is your primary residence. There are no income requirements, no health requirements, and a minimal credit check. The primary qualifying factors are age and the amount of equity that you have in your home. If you would like to take a look at the amount you could potentially receive, click here.

The Reverse Mortgage process is full of education. I will help you understand the loan product fully, and I will also help your family understand. To ensure that you are knowledgeable about the reverse mortgage, the U.S. Department of Housing and Urban Development requires all borrowers go through a reverse mortgage counseling session. This can be done on the phone as well as in person, but must be completed by a HUD Approved Counseling Center. When the loan process is started, I will get you in touch with a counseling center to take as much work off of you, and make the process as easy as possible.

When you are approved for a reverse mortgage, you will have five options to receive the proceeds of the loan.

Straight Tenure – monthly payments that will last as long as at least one of the borrowers is living in the primary residence. These payments are in equal amounts throughout the entire period of time.

Straight Term – monthly payments in a specific period of time that has been selected by you. This option usually increases the monthly payment to you in comparison to the Tenure option.

Line of Credit – similar to a typical home equity loan, but you make no payments on the amount that you draw from the credit line. The line also has the potential to grow with the home’s estimated appraisal value which give you access to more of your homes equity.

Modified Tenure – this is similar to the tenure, but includes a line of credit as well. In other words, you are able to receive a monthly payment for as long as one borrower lives in the residence as well as have access to your home equity in the form of a credit line.

Modified Term – this is similar to the straight term option, but combines a line of credit. This is one of the most common choices for Reverse Mortgage clients because of the increased monthly payment, and the access to the available equity.

If you have any questions about Reverse Mortgages or other loan programs please feel free to contact me.

For further reading on these products, you can click on the links below

• AARP Supports Reverse Mortgages
• Reverse Mortgage Calculator
• Approved Reverse Mortgage Counseling Centers