Reverse Mortgage

A Reverse Mortgage is a mortgage in which a homeowner can borrow money against the value of their home. No repayment of the mortgages principal or interest is required until the home is sold or the borrower(s) do not occupy the home as their primary residence for more than 12 months. The only monthly financial obligations the borrower is responsible for is the taxes, insurance and basic maintenance. Reverse Mortgages allows homeowners aged 62 or older to borrow up to $625,500 depending on several factors, such as the age of the borrower.

With a Home Equity Conversion Mortgage (or HECM) you can turn the equity of your house into cash without having to sell the property, move out of your home, or make monthly mortgage payments. If you are looking for another financial option for retirement, a Home Equity Conversion Mortgage may be just the thing for you.

HECM Lump Sum

A lump sum disbursement is one of many disbursement options available to you. This option works in relation to a fixed-rate HECM loan program, where a single lump-sum disbursement of your proceeds is given to you. You receive a fixed interest rate along with your entire loan proceeds upfront with this option. However, this option limits the amount of proceeds available to you. The permitted amount is limited to the first-years withdrawal limit. The remaining loan amount and proceeds are forgone. Though limiting the proceeds, this option helps preserve more of your home equity. The other disbursement options usually qualify the borrower for larger proceeds as they allow for more equity to be used.

One drawback of this loan program is if down the road you wish to tap into your remaining equity you have to obtain a new reverse mortgage.

HECM Purchase

The Purchase Loan can help buy your next home without monthly mortgage payments if you are 62 years or older. This type of loan allows you to use the equity from the sale of a previous residence to buy your next home in one transaction and is FHA insured.

* Some benefits include:
* Saves your cash
* Increases purchase power
* Gets rid of mortgage payments

HECM Tenure

The HECM Tenure payment another option for funds under a HECM Reverse Mortgage. This option is a monthly payment that continues for as long as you live in your home – no matter how long. You are able to use all your borrowing on the payment or you can take less than the maximum and the rest can be used to get cash upfront and/or hold a credit line for future purposes.


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Are you ready to explore your loan options? Our home mortgage loan experts can help you weigh your choices.