HECM Loans

FHA Insured Reverse Mortgage 

Considering a reverse mortgage? The Home Equity Conversion Mortgage (HECM) stands as the sole program endorsed by the U.S. Federal Government. This esteemed option empowers seniors aged 62 and older to leverage their home equity, potentially enhancing their retirement lifestyle.

Curious about the benefits of a HECM loan? Contact David Blatt today! He can provide insights and assist in determining if this program aligns with your financial objectives.

HECM Loan

HECM, which stands for Home Equity Conversion Mortgage, is a government-insured initiative tailored for homeowners aged 62 and above. With a HECM, you can tap into your home’s value, augmenting your cash flow and potentially enriching your retirement lifestyle.

Picture the freedom of residing in your beloved home without the constraints of a conventional monthly mortgage payment¹. Instead, you could receive regular loan proceeds, reaping the rewards of your years of investment. The beauty of a HECM loan lies in its deferred repayment until the sale of the home, the last borrower’s passing, permanent departure from the residence, or breach of loan terms.

However, responsible homeownership endures. HECM borrowers must uphold property maintenance, stay current on property taxes, and maintain homeowner’s insurance to avert triggering loan repayment. For further details on HECM guidelines, please visit our reverse mortgage page.

A reverse mortgage presents a distinctive opportunity for seniors—a chance to access a portion of their home’s value while relishing the comfort and familiarity of their long-term residence. It’s your home, now working for you!

¹ Borrowers are still responsible for property taxes, homeowner’s insurance, and home maintenance costs.

Features, Advantages, and Qualifications

A significant advantage of a HECM loan is the retention of ownership and title to your home. It remains your cherished abode, now unlocking the equity accumulated over the years.

Furthermore, HECM loans offer peace of mind—your home serves as the primary collateral for the loan, alleviating concerns about jeopardizing other assets.

HECM Loan Insurance: Added Security: As a government-insured program backed by the Federal Housing Administration (FHA), HECM loans come with an additional layer of protection. The FHA mandates a Mortgage Insurance Premium (MIP) to be collected at closing and throughout the loan’s lifespan. These premiums are added to your loan balance, with the upfront MIP based on your home’s appraised value or a maximum of $1,149,825 (the 2024 national HECM limit), whichever is lower. Subsequent FHA insurance premiums are then calculated based on your monthly loan balance.

Benefits of FHA Insurance: This insurance offers valuable protections for both borrowers and their heirs, including:

– Borrowers not being required to pay more than the home’s fair market value.
– FHA reimbursing the lender for any difference if the loan balance exceeds the home’s value upon sale.
– FHA ensuring payment to the borrower by the lender, even if the lender is unable to continue payments.
– The lender being unable to take title if the loan balance surpasses the home’s present market value, ensuring borrowers can reside in their home as long as loan obligations are met.

To retain ownership of the home when the reverse mortgage matures, heirs have the option to purchase the property for 95% of its appraised value, minus standard closing costs and real estate agent fees.

A reverse mortgage enables you to access your home’s value without selling it.

Imagine living in a home whose value has appreciated over the years, witnessing its growth firsthand. However, managing bills and healthcare expenses may pose challenges. Faced with this dilemma, you contemplate parting with your cherished home, an invaluable asset, or enduring financial strains while residing there. Now, envision this predicament swiftly resolved.

“My house has been my home for most of my life. I can’t leave, but I can’t afford to stay.”

A reverse mortgage offers the opportunity to access a portion of your home’s value without selling it, potentially enabling you to receive regular cash flow payments. Repayment occurs upon the sale of your home, the last borrower’s passing, cessation of primary residence occupancy, or breach of loan terms.

The utilization of loan proceeds is entirely at your discretion, whether it involves bolstering your retirement, undertaking home renovations, settling bills, and more—it’s entirely your choice.

To safeguard borrowers, counseling from an independent HUD-approved third-party counselor is mandatory before incurring any loan-related expenses, aside from the counseling fee. While reverse mortgage proceeds are not subject to personal income tax, it’s advisable for borrowers to seek tax advice to understand potential implications on government needs-based programs such as Medicaid and Medi-Cal.

This advertisement does not serve as financial advice. Please consult with a financial advisor regarding your specific circumstances. Certain conditions may lead to loan maturity and the balance becoming due and payable. Borrowers remain responsible for property taxes, homeowner’s insurance, and maintaining the property to HUD standards. Failure to comply could trigger loan maturity. Credit approval is contingent upon age, income standards, credit history, and property qualifications. Program rates, fees, terms, and conditions may vary by state and are subject to change.

Borrowers are encouraged to seek professional tax advice concerning reverse mortgage proceeds.