Our 5-Step HECM Loan Process
We provide an easy 5-Step Process to obtain a HECM loan.
| 1Meet with an Advisor by phone or in person to discuss your financial needs and goals. |
| 2 Decide if a HECM loan is right for you. If so, complete the application with the help of an Advisor. |
| 3Speak with an Independent, third-party, HUD-approved counselor. |
| 4Obtain a property appraisal to determine the value of your home. This is a key factor in determining how much money you may qualify for as a loan. |
| 5 Your paperwork will be processed and eligibility determined. Any outstanding liens on your property will be satisfied during this process. Once all loan conditions are met, you will sign
the final paperwork to close your loan. You can recieve your loan proceeds any way you choose – a lump sum, monthly check, a line of credit, or any combination of these options. |
Once your loan funds and all existing mortgages and fees are paid, you are free to choose how you want to spend the remaining loan proceeds. This could include anything from paying off debt, funding medical expenses, stretching your retirement savings, remodeling your home or building a “safety net”; spend it however you like.
Loan Safeguards
A HECM loan has built in safeguards that protect you and the home.
Federal Housing Administration (FHA) Insured
HECM loans are FHA insured. You are always protected against lender insolvency and can expect to receive your proceeds.
Mandatory Mortgage Insurance
HECM loans are required by U.S. Department of Housing and Urban Development (HUD) to charge a mandatory mortgage insurance. This insurance protects the borrower and their heirs in the event the loan balance is higher than the home’s value at the time of sale.
Independent Counseling
Independent counselors which are approved by HUD provide you with objective information, and help you understand the process.
Capped Interest Rates
If your loan has an adjustable interest rate, there is a limit on how much some interest rates can change during a specific period of time.
Full Disclosure of Costs
Lenders are required to disclose your estimated loan costs and fees upfront through a Good Faith Estimate (GFE).
Three Days to Cancel
After signing your loan paperwork, you have three business days to cancel the loan. This “Right of Rescission” applies to the HECM for Refinance Product, but does not apply to the HECM for Purchase loan.
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