HECM – Home Equity Conversion Mortgage
Understanding A Home Equity Conversion Mortgage
If you are a homeowner and nearing the age of retirement, and looking for a way to supplement your income, you may want to consider applying for a home equity conversion mortgage, or HECM. An HECM is a kind of reverse mortgage that does not require any monthly mortgage payments and converts your home equity into cash or credit. If you are located in the areas of West Palm Beach, St. Pierce, or Tampa Bay, Florida, and have questions about your mortgage options, CTC Mortgage is here to help. Read on to learn more about boosting your financial portfolio with a home equity conversion mortgage.
Essential Information: Home Equity Conversion Mortgage
An HECM is classified as a reverse mortgage, which essentially is a home loan that is taken out against the equity of your home. In a reverse mortgage, borrowers who are 62 years or older can withdraw part of their home equity and use that as cash or credit for any financial purpose. Many reverse mortgage borrowers commonly use the resulting funds to pay off other existing debt, supplement their income in retirement, or make improvements and renovations to the property. An HECM is considered a type of non-recourse loan and is available by approved lenders through the United States Department of Housing. HECM loans are backed by the federal government and the Federal Housing Administration, (FHA), bankrolls and provides insurance on these mortgages. Home equity conversion mortgages can offer many benefits to a borrower. The major benefit of an HECM is that it can allow a borrower to eliminate their monthly mortgage payment and tap into their home’s equity while still residing in the home. Additionally, since they are insured by the government, HECMs are a safer loan option that can come with lower interest rates.
Qualifying For An HECM
There are several requirements that must be met in order to qualify for a home equity conversion mortgage, including:
● The borrower must be at least 62 years of age or older
● The home must be the primary residence of the borrower
● Once approved, the borrower(s) must participate in an information session by an HECM loan counselor
● A borrower cannot be delinquent on any federal debt owed
● The borrower must own the property outright, or have a majority of the original home loan paid off before qualifying for an HECM
● The property must either be a single family, 2-4 unit property, a home manufactured to meet requirements of the FHA, or a condo that has been approved by the U.S. Department of Housing and Urban Development, (HUD)
Get Assistance With Your Loan Options Today
Obtaining a home equity conversion mortgage has the potential to offer several benefits to the right type of borrower. If you are located in West Palm Beach, St. Pierce, or Tampa Bay, Florida, and have questions about your home loan options, contact CTC Mortgage today for a consultation.
