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Myths & Realities of HECM Loans




                As with many financial products, Home Equity Conversion Mortgage (HECM)

              loans can be complicated, and there are a number of misconceptions about how
                        the product works. Do you know the myths vs. the realities?
















          Myth                                 Myth                                Myth
           #1                                   #2                                   #3

        The lender owns the home.            The borrower is restricted on how to   Once loan proceeds are received,
                                             use the loan proceeds.               you pay taxes on them.


        Fact Like all mortgage loans, the HECM   Fact The proceeds from a HECM    Fact Like any loan, HECM proceeds
        loan is secured by a lien and you will not   loan can be used for almost any   are paid out tax free as they are not
        lose your home as long as you continue   purpose. Many borrowers use them to   considered income. However, it is
        to meet the loan obligations. You    supplement their retirement income,   recommended that you consult your
        cannot lose your home under normal   delay receiving Social Security benefits,   financial advisor in connection with your
        circumstances and so long as you pay   pay off higher-interest credit cards, pay   reverse mortgage loan application.
        your taxes and insurance and otherwise   for medical expenses, remodel their
        comply with the loan terms.          home, or help their adult children.
                                             Prudence along with budgeting should
                                             be the proper approach to enjoying
                                             proceeds received from your HECM loan.











          Myth                                 Myth
           #4                                   #5


        The home must be free and clear of   Only people with financial hardships
        any existing mortgages.              need HECM loans.

        Fact Actually, many borrowers use    Fact The perception that HECM loans
        the HECM loan to pay off an existing   are only for “financially strapped”        Call today to
        mortgage and eliminate monthly       borrowers is changing  — affluent senior

        mortgage payments. Paying off the    borrowers with multimillion-dollar           learn more!
        existing mortgage and any other liens   homes and healthy retirement assets are
        is required as part of the loan. It is the   using HECMs as part of their financial   (888) 978-4991
        borrower’s responsibility to continue   and estate planning, and are working
        to pay for property taxes, homeowners   closely in conjunction with financial     aag.com/affinitylending
        insurance, and home maintenance.     professionals and estate attorneys
                                             to enhance their overall quality and
                                             enjoyment of life.
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