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Financial Assessment Changes
                                                                      to HECM loans require a thorough
      HECM loans                                                      evaluation of the potential
                                                                      borrower’s ability to meet the
      Home Equity Conversion Mortgages (HECMs),                       financial obligations of the loan
      also known as reverse mortgage loans, help                      terms, such as the ability to pay for
      American homeowners age 62 and older                            homeowners insurance, property
      convert a portion of their home equity into                     taxes, and home maintenance.
      tax-free cash. HECMs are insured by the Federal
      Housing Administration (FHA) and allow seniors
      more financial security as well as the ability       Non-borrowing Spouse HECMs
      to age in place. (Borrowers could be subject         are available to borrowers with
      to foreclosure for reasons including failure         an eligible non-borrowing spouse                     Common Uses of HECM Loan Proceeds
      to maintain the property or to pay taxes and         (one under the age of 62), with                            Eliminate monthly mortgage payments
      insurance.)                                          rules in place to allow such spouses to remain           (a requirement of the loan; borrower must
                                                           in the home, even if the borrower passes                 continue to pay property taxes, homeowners
                                                           away, provided they continue to honor the                insurance, and home maintenance costs).
      How does it work?                                    terms of the loan.
                                                                                                                    Make retirement savings last longer.
      A HECM loan allows you to turn some of the
      equity in your home into cash to improve                          Counseling Before loan approval,            Use a HECM line of credit to build a
      your lifestyle. You will continue to live in your               potential borrowers must complete             safety net for unplanned emergencies,
      home and retain ownership without monthly                       a counseling session with an FHA-             home repairs, and healthcare expenses, or
      mortgage payments. The loan balance will                        approved counselor. The counselor             preserve investment accounts during market
      be repaid when the last borrower or eligible                    will ensure that borrowers                    downturns.
      non-borrowing spouse has left the home or                       understand all of their options                 Supplement your retirement income with
      does not otherwise comply with the loan                         and are in a position to decide if a          monthly payments.
      terms. (Borrower must continue to pay property                  HECM loan is right for them.
      taxes, homeowners insurance, and home                                                                           Use a HECM for Purchase loan to buy a
      maintenance costs.) The amount you receive is                                                                 home that better fits your needs.
      based on the age of the youngest borrower or
      eligible non-borrowing spouse, appraised value             Minimum Eligibility Factors                        Support expenses, like caregiving and
      of the home, and the current interest rates.                                                                  home modifications.
                                                                  n You must be age 62 or older (a non-

                                                                   borrowing spouse may be under 62).
      HECM Has Built-in Safeguards to

      Better Protect Borrowers                                   n You must live in your home (must be                        Call today!
                                                                   principal residence).
        The United States Department of Housing and              n You must own your home.                                    (888) 978-4991
      Urban Development (HUD) has put safeguards
                                                                   Y
      in place to protect borrowers and improve                  n  ou must meet the financial
      HECM loans.                                                  requirements of the HECM loan.
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