Meet the New Reverse (HECM) Mortgage
Its official name is a Home Equity Conversion Mortgage (HECM), a loan insured by the Federal Housing Administration (FHA) for homeowners age 62+. Beginning in 2017, the reverse mortgage program has undergone significant changes designed to protect the borrower and their heirs.
Two Types of HECM Loans
There are two types of HECM loans: a variable line of credit and a fixed-rate mortgage. The line of credit is the most popular type of HECM since borrowers can qualify for a much larger amount and access additional funds in the future if there is enough equity.
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Both allow you to:
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Access a portion of your home equity
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Use the income tax-free cash proceeds as you wish
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Eliminate monthly mortgage payments​
​You retain ownership of your home—all you have to do is continue to pay property taxes and homeowners insurance and maintain it as you do now.
How Does it Work?
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​The lender calculates the amount a borrower can qualify for based on the age of the youngest borrower and the amount of equity in the home. If there is an existing loan on the property, that loan would be paid off, and the mortgage payment would be eliminated. If the total line of credit amount exceeds the mortgage being paid off (or if the house is owned outright), a portion of that amount can either be taken as a ‘lump sum’ at closing, converted into a monthly income stream, or simply remain available for future withdrawals.
Who Can Qualify?​
The qualifications for a reverse mortgage are simple:​
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For a HECM, either you or your spouse must be 62+ years or older and 55+ for proprietary/jumbo reverse products
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You must live in the property
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You must meet the minimum equity, credit, and income requirements as determined by the lender.
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How Can I Use the Money?
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​You can use the money for anything you like, such as supplementing your income, paying for health care expenses, paying off debt, improving your home, traveling, or just enjoying more discretionary income.
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Proprietary Reverse Loans (Also known as Jumbo Reverse loans)
We also offer proprietary reverse loans that are different from HECM products. Typically, these loans serve homeowners with home values over 1.15 million and up to 4 million.
To learn more about our proprietary reverse loan products, visit our product page HERE.