A Home Equity Conversion Mortgage, commonly referred to as HECM, is insured by the Federal Housing Administration. Borrowers will be responsible for their property taxes, homeowner’s insurance, and anything they might need for home maintenance purposes. The funds from a HECM can be disburse in a variety of ways, the most frequent being a HECM Line of Credit.
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What is a Home Equity Conversion Mortgage?
- Is It Right For Me?
- What Are The Benefits?
- Do I Qualify?
- Things to Consider
- Types of Mortgage Payouts
Is a Reverse Mortgage Right For Me?
- Do you have a strong desire or commitment to stay in your own home?
- Do you want to enjoy your lifestyle and your senior years more?
- Do you need or want more savings for major or unexpected expenses?
- Do you have a regular needs to supplement your income and find your home is your biggest asset?
- Do you want to live worry-free, with the peace of mind that your financial needs are managed?
If these statements sound like you, then you might be just the right candidate for a reverse mortgage.
Benefits of a Reverse Mortgage
- A reverse mortgage can give you more financial freedom and help you utilize that to improve your quality of life.
- You won’t have to make any payments until the loan ends.
- You are allowed to stay in your own home and keep your title.
- Proceeds from reverse mortgages are tax-free and not considered income.
- Income is not a factor in loan qualification.
Do I Qualify For A Reverse Mortgage?
- Are you at least 62 years of age?
- Do you own your property outright, or is the mortgage small enough to be paid off in the reverse mortgage process?
- Do you occupy the property as your primary residence?
- Are you delinquent on any Federal debt?
- Is your home considered a single family home that meets FHA requirements?
If you answered “Yes” to all these questions, then you may be able to qualify for a HECM Reverse Mortgage.
What Should I Be Considering?
Your home has more than a monetary value. It may be more important to your heirs than you realize. Be sure to talk the decision over with your family first.
Reverse mortgages are a specialty loan product and might not be as common or well known by your average loan officer. Be sure you speak with a Reverse Mortgage specialist who can help you navigate the waters safely.
Types of Mortgage Payouts
- Lump Sum Payment
- Line of Credit
- Fixed Monthly Payments
- Combination of These Options
No matter what you chose, you will not have to make any payments on the mortgage, as long as you are living in the home. When the reverse mortgage comes due, you can sell home to pay off the loan or pay off the loan and keep your home.
What Are the Costs?
- Origination Fee – The origination fee is designated to compensate the lender for processing the loan.
- Mortgage Insurance Premium – Mortgage insurance is required to ensure you will receive expected loan advances without having to worry about repayment as long as you live in your home.
- Closing Costs – Additional costs will be incurred from a variety of services need to complete the loan, such as appraisal fees, recording fees, inspections, credit checks, and other necessary processes for successful loan origination.
- Servicing Fee – A monthly fee will be incurred for the lenders who are servicing the loan, creating statements, disbursing payments, and making sure all requirements are met.
- Interest Rate – All reverse mortgage loans charge interest and the homeowner can decide between adjustable or fixed rate options.
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Your Reverse Mortgage Specialist
Devin Fahrner has over two decades of experience in the mortgage and consumer finance industries and uses his knowledge to provide the highest quality services to his clients and their families. A graduate of Western Oregon State University, Devin has worked in nearly every position in the mortgage industry, including working with Reverse Mortgages. The experiences and challenges he’s encountered over the last several years have provided him a vast skill set that allows him to evaluate each client and help enlighten them on the best possible solution to fit their needs.
In addition to his experience in the business world, Devin proudly spent seven years serving in the Marine Corps. His military experience has provided him discipline and a strong work ethic that he has applied in every aspect of his life.
If you have questions about the world of reverse mortgages, Devin and his team are prepared to help. Call us today for a consultation to determine if a Reverse Mortgage is right for you and your family.