Almost everyone knows what a mortgage loan is, and a good number of those people are familiar with most of the mortgage plans available. It's a simple concept that aids millions of Americans in financing new houses by taking out a loan and paying it back in increments. However, there aren't many people that have heard about reverse mortgage loans, this is because reverse mortgage loans aren't for just anybody, they're for people experiencing their golden years and who are 62 years of age or older. Yet, with any kind of mortgage, even a reverse mortgage, people need to be careful as to what service they go to. Services that offer mortgages, especially reverse mortgages, need to be reputable, they need to have been in business for a long time and have a good track record, and perhaps most importantly the lenders employed by the company must be honest, forthright, and concerned about their clients' welfare.
HECM Reverse Mortgage (HECM) is one such reputable product, which is linked by a reputable company. HECM is the oldest and most popular reverse mortgage product, and it makes up for 90 percent of the total market, now that's a good reputation! HECM has been available since 1989 and is insured by the federal government itself through an equally as reputable system called the Federal Housing Administration (FHS), which is part of the U.S. Department of Housing and Urban Development. Now, that is a lot of long names, and a lot of acronyms to follow, but the only thing you as a senior citizen need to remember is HECM.
With a HECM Reverse Mortgage the older you are, the more money you are eligible to receive with your reverse mortgage loan. This reverse mortgage is a mortgage where the lender pays the borrower (homeowner) instead of the other way around. Lenders pay the homeowner in One Lump Sums, monthly payments, periodic credit lines, or a combination thereof. There is no risk of losing the house in a foreclosure like there is with a regular mortgage, and the money received can be used according the recipient's own discretion. The way a HECM loan is paid back is through the sell of the home. The home is automatically sold if the homeowner becomes deceased (unless the heir(s) wish differently) if the homeowner is absent for more than 12 months or has to move somewhere else in order to receive care with a family member or in a nursing home, or if the homeowner decides to sell. If the house sells for higher than the loan amount due then the existing homeowner or heir(s) receives the difference. In contrast, if the house sells lower than the loan amount due, then the insurance company typically pays the difference.
HECM is perfect for senior citizens who don't want to worry about pesky monthly mortgage fees, and want to receive money instead. Also, if you're still confused, applicants of a HECM are required by law to attend a financial counselor with no cost to the applicant; the counseling service will provide more information into HECM and the service is paid for by the Federal Government.
For more information please visit our website on Reverse Mortgage
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Frequently Asked Questions
Reverse mortgage tax question
By: pja | 06-09-2008
for 2008 i did a reverse mortgage for my home and took a lump sum,i have retired and collect social security and i am 64,i worked 2 months in 2008 and my net income from that was approx.13,300.00.
than i started collecting social security monthly therafter.my question will i pay taxes one the lump sum i received from my reverse mortgage?
Happiness for elders
By: fire&ice | 30-07-2008
My mother is in her 70's. She said she does'nt qualify for a reverse mortgage. Can u refer her to someone that can advise her on her situation? She is still working and financially struggling. I want my mom to have as little to worry about financially and to live la vida loca before God calls her home.
Jumbo reverse mortgages
By: S. Allen | 15-07-2008
What lenders are doing jumbo ($700,000 to $750,000) reverse mortgages and who can I contact for more information?
Jumbo reverse mortgages
By: S. Allen | 15-07-2008
What lenders are doing jumbo ($700,000 to $750,000) reverse mortgages and who can I contact for more information?
Joseph cina - where are you?
By: gkwau | 11-07-2008
Joseph cina - where are you?
Refinance or Reverse Mortgage
By: mlcochran | 10-07-2008
I am trying to find a company to refinance my current mortgage or do a reverse mortgage on my home. My credit report is not good at this time so I am having some trouble finding a Company that will do this for me. Could you give me names and numbers of some Companies that will be able to help me?
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