Page 1 - AAG001_Opportunities and Challenges Flyer
P. 1

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 that   this tax-free** loan source of money helpful. Borrowers are
        borrowers are selling their homes to their lenders. This is simply   still required to pay property taxes, insurance and home
        not true; the borrower continues to own the home and retain   maintenance costs.
        the title. The primary purpose of a HECM is to help seniors stay   **Loan proceeds are paid tax free; consult your tax advisor.
        in their homes. Loan requirements include maintaining the
        home and keeping current on property taxes and homeowner's
        insurance.                                             Government regulations empower you to make
                                                               informed decisions and protect you from default.
                                                               Borrowers are required to go through third-party counseling
        No monthly loan payments are required.*                by an FHA-approved counselor as part of the application
        Whereas most mortgage loans require some form of monthly   process. This acts as a safeguard by ensuring you have
        repayment, a HECM requires no repayment until you move out   thorough, unbiased information and that all your questions are
        of or sell the home, pass away, or default on loan terms. This   answered before you proceed with your loan. Other protections
        is beneficial because the amount that would have been spent   include limitations on lender origination fees and a financial
        on housing can be diverted toward other expenses, saved, or   assessment to evaluate your ability to fulfill loan obligations.
        invested. However, if you so choose, you can make payments
        with no pre-payment penalty. Your only financial responsibility
        is to pay for property taxes, homeowner’s insurance, and home   Upon repayment, the lender cannot collect more than
        maintenance costs, leaving extra money in your pocket each   the home is worth.
        month.                                                 Because HECMs are non-recourse loans, borrowers will never
        *Borrower(s) must continue to pay property taxes and   have to pay more than the home is worth when a loan maturity
        homeowner’s insurance, maintain the home, and otherwise  event occurs.
        comply with the loan terms.
                                Loan
                               Advant
                                ages

                                                                                                                   AAG001
   1   2