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Is A HECM Loan

Right For You?

Retirement is often referred to as “the golden years” for a good
reason: For many, it’s the best season of life.

If you’re 62 or better and own your home, a Home Equity

Conversion Mortgage (HECM) loan could be just the resource
you need to give your portfolio a boost so you can retire better.

Tom Selleck
American Advisors Group Paid Spokesperson

Our simple guide below will help you consider the factors to determine
whether a HECM loan is the right option for you.

Loan Advantages

You can live in your home as long as you wish and Loan proceeds from a HECM are not taxable.
retain the title, as long as you comply with the loan. Because some of your sources of income, such as investments,
As with all other mortgage loans, a lien is placed on the may be taxed as you draw from the accounts, you may find
home. One common misconception about HECM loans is this tax-free** loan source of money helpful. Borrowers are
that borrowers are selling their homes to their lenders. This still required to pay property taxes, insurance and home
is simply not true; the borrower continues to own the home maintenance costs.
and retain the title. The primary purpose of a HECM is to help **Loan proceeds are paid tax free; consult your tax advisor.
seniors stay in their homes. The primary purpose of a HECM is
to help seniors stay in their homes. Loan requirements include
maintaining the home and keeping current on property taxes Government regulations empower you to make
and homeowner's insurance. informed decisions and protect you from default.

Borrowers are required to go through third-party counseling
by an FHA-approved counselor as part of the application
No monthly loan payments are required.* process. This acts as a safeguard by ensuring you have
Whereas most mortgage loans require some form of monthly thorough, unbiased information and that all your questions are
repayment, a HECM requires no repayment until you move out answered before you proceed with your loan. Other protections
of or sell the home, pass away, or default on loan terms. This include limitations on lender origination fees and a financial
is beneficial because the amount that would have been spent assessment to evaluate your ability to fulfill loan obligations.
on housing can be diverted toward other expenses, saved, or
invested. However, if you so choose, you can make payments
with no pre-payment penalty. Your only financial responsibility Upon repayment, the lender cannot collect more than
is to pay for property taxes, homeowner’s insurance, and home the home is worth.
maintenance costs, leaving extra money in your pocket each Because HECMs are non-recourse loans, borrowers will never
month. have to pay more than the home is worth when a loan maturity
*Borrower(s) must continue to pay property taxes and event occurs.
homeowner’s insurance, maintain the home, and otherwise
comply with the loan terms.
Loan Advant
ages

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