Page 7 - WSAAG052_Your Guide to Reverse Mortgages Booklet

Your HECM Loan Responsibilities Advantages & Strategies

Although a HECM can eliminate monthly mortgage Homeowners are using the advantag-
payments (principal and interest), you must continue es of a HECM loan in multiple ways to
to maintain your property, pay all property taxes,
homeowners insurance and comply with your loan terms, achieve a better retirement.
as you would with any mortgage. To ensure that you can n With a HECM loan, you not only remain the owner
meet these ongoing financial responsibilities you can of the home, but you can live in your home for
establish a set-aside account that can be financed into as long as you want, with no monthly mortgage
your HECM to limit your initial, out-of-pocket expenses. payments*
* In addition to maintaining your property, you must continue to
If you don’t comply with your loan terms, however, pay property taxes, homeowners insurance, HOA fees, and
your home could go into default, which could lead to otherwise comply with all loan terms.
foreclosure.
n The home equity you access is tax free
It’s also important to note that while you can
sell your home and pay off your loan balance n Use your proceeds almost any way you wish (See
any time without a prepayment penalty, HECM loans Strategies)
make more sense financially the longer you plan to stay in
your home, as you’re spreading your initial loan costs out n HECMs are federally insured, meaning if your
over a longer period. lender defaults, you still receive your payments
Receiving funds from a HECM loan will not affect your n Because HECM loans are non-recourse loans,
Social Security or Medicare. A HECM, however, could neither you nor your heirs will ever owe more than
impact Medicaid or Supplemental Security Income (SSI), your home is worth
so please consult with your accountant or tax advisor. Your Guide to a Better Retirement 7