The only way to know for sure is to speak with a loan officer that specializes in this very unique product. A reverse mortgage is a type of home loan that lets you convert a portion of the equity you built up over the years making mortgage payments into cash. Oftentimes, you will hear this loan referred to as a Home Equity Conversion Loan.
Reverse Mortgages or HECM’s have changed over the years just like other loans. There is now more government regulation in place for the protection of the consumer. The only reverse mortgage insured by the US Federal Government is called an HECM and it is only available through an approved FHA lender.
Mortgage Equity Partners has a team of professionals who specialize only in HECM’s. Our team helps older home owners determine if this program is right for them by counseling them on the Pros and Cons of the program. It is not right for everyone.
The reverse mortgage allows a borrower to stay in their home and actively use the equity at the same time. The borrower must be at least 62 years of age and have the resources to pay property taxes and insurance as well as maintain the property. The home must be owned outright free and clear of any liens. Borrowers are also required to meet with an independent HECM counselor to be sure they understand the program thoroughly.
There are other ways to get equity out of a property such as a home equity loan or a cash out refinance, but these loans have strict requirements for income and credit. In addition, borrowers will be required to pay these loans back monthly. A HECM has no credit score requirement and borrowers are receiving a payment from the lender rather than making one. People often find their incomes reduced in retirement and if that is the case a HECM can be a better option for some.
According to Lillian Staffier, Client Services Manager at Mortgage Equity Partners Reverse Mortgage Division, “People believe a lot of things that are just not true about Reverse Mortgages. People think they are going to lose their homes, but the fact is you never end up owing more than the house is worth. You just have to be sure that you meet the requirements of the loan, pay your taxes and insurance, and maintain the property,” she said. “Another concern is that in the event of the borrower’s death the heirs will be responsible for the loan. Also, not true!” she adds.
Reverse Mortgages or HECM’s are a specialized product that allow homeowners to age in place. They are a perfect product for an aging homeowner who has accrued a lot of equity, but is worried about having enough income to live comfortably.
Focusing on products such as Reverse Mortgages is just one way that Mortgage Equity Partners is working to meet the changing needs of our borrowers over time.
Want more information on our HECM program?
Contact the team of Lillian Staffier and David Gillmeister (MLO#884339) to set up a no obligation, no pressure information session.