Enhance Your Financial Security With a Home Equity Conversion Mortgage
Looking for Financial Security, try a Home Equity Conversion Mortgage. We understand that you want to transition easily into the retirement lifestyle of your choice. We are here to help you access a portion of your home’s equity and make the most of your retirement years.
Explore Your Options
Whether you are planning on retiring soon or have already started retirement, take a moment to think about how you envision your retirement lifestyle. Even if you have planned, saved and invested carefully, you may have fewer funds than you had expected to meet your goals. Now is the time to consider all of your financial options and make the right decisions for your future.
| Option | Pros | Cons |
| 1. Delay retirement or return to work | You continue earning income to pay for your financial obligations. | You may be unable or unwilling to continue working because of poor health or other reasons. |
| 2. Sell your house and downsize | You eliminate or reduce your current mortgage payment and maintenance. | You may want to stay in your current home. You may still have a mortgage. Closing costs add to your financial burden. |
| 3. Obtain a home equity loan or refinance your existing mortgage | You remain in your home. You may be able to lower your monthly mortgage payments and even pay off other debts. | You must still pay your monthly mortgage, plus closing costs for the equity loan. |
| 4. Decrease expenses and modify your lifestyle | You eliminate unnecessary expenses and reduce your monthly cash outflow. | It may be difficult to cut back if you are already living frugally, or you may not want to sacrifice some comforts. |
| 5. Obtain a Home Equity Conversion Mortgage (HECM) | You access tax-free cash to pay off your mortgage and may have additional funds for expenses or financial goals. | The loan balance grows overtime and the value of your estate may decrease overtime. |
A HECM Loan Defined
A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a Federal Housing Administration (FHA) insured loan which enables you to access a portion of your home’s equity
to obtain tax-free1 funds without having to make monthly mortgage payments.2 If you are 62 years of age or older and have sufficient home equity, you may be able to get the cash you need to:
- Pay off your existing mortgage 3
- Continue to live in your home and maintain the title
- Pay off medical bills, vehicle loans or other debts
- Improve your monthly cash flow
- Fund necessary home repairs or renovations
- Build a “safety net” for unplanned expenses
A Few of the Loan Benefits
- Eliminates your existing monthly mortgage payments2
- You can stay in your home and maintain the title
- Loan proceeds are tax-free and can be used any way you choose
- Heirs inherit any remaining equity after paying off the HECM loan
- The HECM loan is FHA insured
- Consult your financial advisor and appropriate government agencies for any effect on taxes or government benefits.
- You must still live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements.
- Your current mortgage, if any, must be paid off using the proceeds from your HECM loan. 4 Not applicable to HECM for Purchase
Eligibility
To be eligible for a HECM loan, some key requirements are:
- The youngest borrower must be at least 62 years of age
- You must live in your home as your primary residence and have sufficient equity
- Be able to pay off your existing mortgage using the HECM loan proceeds
- Live in a single family, two to four unit4owner-occupied home, townhouse, approved condominium or manufactured home
Requirements
In addition to eligibility, you must meet the following conditions to obtain a HECM loan:
- Complete a HUD approved counseling session
- Maintain your home according to FHA requirements
- Continue to pay property taxes and homeowners insurance
