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Information for Financial Advisors and CPAs
Monthly Payments
Learn more about how Home Equity Conversion Mortgage (HECM) loans can offer Borrowers make no monthly mortgage payments ,
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an intelligent, tax-efficient solution for homeowners 62 and over. unlike traditional mortgages, with a HECM loan, the
lender pays the borrower. Borrower must continue
to pay property taxes and insurance.

What is a HECM? Loan Amount Advantages of a Home Equity Loan

A HECM enables homeowners 62 and older to The amount of the loan depends on: age of the Unlike a HELOC loan, a HECM loan does not require
access their home’s equity as tax free loan proceeds youngest borrower or eligible non-borrowing spouse, monthly mortgage payments 2.
1
while eliminating their monthly mortgage current interest rates, appraised value of the
payments. Borrower must continue to pay property home and amount of equity in the FEATURE HECM HELOC
taxes and insurance. home. Monthly Mortgage Payment O NO P YES

Minimum FICO Score* O NO P YES
Maintaining Ownership Receiving the Money Guaranteed Growth Rate** P YES O NO

Borrowers retain ownership of their home but are
subject to a lien granted to the lender. They are Borrowers can receive the *Clients must be able to prove they are willing and able to pay their
responsible for paying property taxes, homeowner’s cash from a HECM loan in property taxes, homeowner’s insurance, and conduct general home
maintenance.**This line of credit also includes a compounding
insurance, and the home maintenance, and several ways: feature so that available credit increases each period on the prior
otherwise complying with the loan terms. The period’s available credit balance.

borrowers may continue to live in the home and the 3 A single lump sum
loan doesn’t have to be repaid until they leave, sell 3 Monthly payments Use of the Money
the home, or fail to meet loan obligations.
3 Line of credit Common uses of the proceeds include paying
for monthly living expenses, medical bills, home
3 A combination of the
repairs and more. The HECM loan can also be used
Call today and find out if above prior to portfolio withdrawals, after investable
you qualify! Tom Selleck, American Advisors Group assets are depleted, or as coordinated strategy
Paid Spokesperson
based on portfolio returns.

Government Benefits
Example An eligible couple lives in a home valued at $450,000
and owes $100,000 on their mortgage. They take out a HECM loan Funds from a HECM loan generally do not affect
regular Social Security or Medicare benefits,
and pay off their current mortgage which eliminates their monthly however, need-based benefits such as Medicaid
payment and opens a $80,894 line of credit. This line of credit grows and Supplemental Security Income (SSI), could be
over the next 10 years to be worth $140,542. Since they eliminated affected.
their mortgage payment, there is no need to draw down their 401K
to supplement monthly expenses.

This example is based on the youngest borrower age 65, home purchase price of $450,000, IMIP of $9,000,
origination fee of $6,000 and other settlement costs of $4,555. HECM ARM as of 11/16/2017.