Yes, that is a common misconception. I thought the same thing until I learned more about this great loan option. I learned that a reverse mortgage can provide financial security for older homeowners who have significant equity in their homes and need additional income to cover expenses in retirement. I also found out that there are specific changes that have been made to make HECMs completely safe when used in the right situation.

• There are now government implemented regulations and protections for borrowers.
• HECMs are also non-recourse loans so you can never owe more than the value of the home.
• They are also federally insured which provides another layer of protection.

A HECM can help you downsize or relocate by providing an additional income source to cover the cost of moving. With a reverse mortgage, you are able to access funds from the equity in your home without needing to take on additional debt or worry about where the money will come from. This means that you have additional resources to cover the costs associated with downsizing or relocating such as closing costs, taxes, and other fees. You also have more flexibility when it comes to how you receive the payments and can choose between a lump sum payment, monthly payments, or a line of credit that grows over time.

A HECM (Home Equity Conversion Mortgage) can give you peace of mind by providing financial security and flexibility, as well as estate planning benefits. With a HECM, you can access funds from the equity in your home without needing to take on additional debt or worry about where the money will come from. You can customize your payments to fit into your budget and lifestyle, and you can use the funds for paying off debts, covering medical expenses, or taking advantage of tax savings. Lastly, a HECM preserves inheritance for other family members while still giving you peace of mind that your financial needs will be taken care of after you pass away.

Both HELOCs and HECMs offer credit lines with variable rates, but there are some big differences to consider. With a HELOC, you'll need to start paying interest on what you borrow right away, and you'll have to pay back the entire balance within 10 years. Plus, once that draw period is over, you can't borrow any more. But with a HECM, you can draw on your credit line without any obligation to make monthly payments. That means you won't ever have to worry about the loan "resetting" or "maturing."

A HECM loan ensures that your available credit line grows annually, providing a safety net for homeowners. On the other hand, HELOCs don't increase the available line, and banks have the power to freeze or reduce it in certain circumstances.

The HECM for Purchase program allows you to purchase a home without the burden of mandatory payments as long as you reside in the property. A HELOC is only a loan on existing equity and not able to provide any purchase options.

There are many lenders who provide services for HECMs. We have found 2 exceptional loan agents that can certainly help you apply. Danielle Durtschi or Kevin Rice would be more than thrilled to help you!

Homeowners looking to secure a Home Equity Conversion Mortgage (HECM) loan may be familiar with closing costs and fees associated with traditional loans, but there are also other fees they should understand before completing the loan process. A HECM loan requires origination fees based on the value of the home, followed by an upfront mortgage insurance premium, that is added to the loan amount. While this might seem daunting, it’s important to evaluate these potential expenses against other benefits of a HECM loan, such as tax advantages and limited to no out-of-pocket costs. With that in mind, those looking to take advantage of a reverse mortgage should make sure the cost savings outweigh any associated fees.