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What is a HECM reverse HECM Has Built in Safeguards to
mortgage loan? Better Protect Borrowers
Home Equity Conversion Mortgages (HECMs), The United States Department of Housing and
also known as reverse mortgage loans, help Urban Development (HUD) has put safeguards
American homeowners age 62 and older convert in place to protect borrowers and improve HECM
a portion of their home equity into tax-free reverse mortgage loans.
cash . HECMs are insured by the Federal Housing
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Administration (FHA) and allow seniors more 1 Financial Assessment Recent changes to
financial security as well as the ability to age in HECM loans require a thorough evaluation
place. of the potential borrower’s ability to meet the
financial obligations of the loan terms such as the
1 Consult your tax advisor ability to pay for homeowner’s insurance, property
taxes, and home maintenance.
How does it work?
2 Non-borrowing Spouse Loan amounts are
A reverse mortgage loan allows you to turn some available to borrowers with a non-borrowing
of the equity in your home into cash to improve spouse under the age of 62 and rules allow the
your lifestyle. You will continue to live in your eligible spouses of borrowers who pass away to
home and retain ownership without monthly stay in the home without foreclosure as long as
mortgage payments.The loan balance will be Common uses of a reverse the non-borrowing spouse complies with the loan
repaid when the last borrower or non-borrowing mortgage terms.
spouse has left the home or does not otherwise
comply with the loan terms. The amount you The proceeds from a reverse mortgage loan 3 Counseling Before loan approval, potential
receive is based on the age of the youngest can be used for almost anything: borrowers must complete a counseling
borrower or eligible non-borrowing spouse, p Eliminate monthly mortgage payments 2 session with an FHA-approved
appraised value of the home, and the current 2 Borrower must continue to pay property taxes, counselor. The counselor
interest rates. homeowner’s insurance, and home maintenance costs will ensure that borrowers
p Make retirement savings last longer understand all of their options
2 Borrower must continue to pay property taxes, and are able to decide if a
homeowner’s insurance, and home maintenance p Use a “standby” HECM reverse mortgage HECM loan is right for them.
costs. growing line of credit to preserve
Tom Selleck Actor andAmerican
investment accounts during market Advisors Group Paid Spokesperson
downturns or build a safety net for
unplanned emergencies, home repairs and
Qualifications include: healthcare expenses
p You must be age 62 or older p Supplement your retirement income with
(a non-borrowing spouse may be under 62) monthly payments CALL TODAY
p Live in your home (must be principal residence) p Use a HECM for Purchase loan to buy a to learn more!
p The borrower must own the home home that better fits your needs
p p Support aging in place expenses, like
The borrower must meet the financial
requirements of the HECM program caregiving and home modifications