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HECM Loans

Home Equity Conversion Mortgages are helping seniors in Valdosta, GA achieve their retirement goals. With the rising cost of living, more adults 62 and older are turning to Michael Weltman and getting his help with creative financing.

What is a HECM loan?

HECM stands for Home Equity Conversion Mortgage. A HECM is the FHA-insured reverse mortgage that allows qualified homeowners 62 and older to access part of the value of their home. Home equity can be accessed in a number of ways and enables greater cash flow to the borrower. Imagine living in your home without a traditional monthly mortgage payment¹, or instead, enjoying monthly loan proceeds from the years you’ve invested in your home. After you get a reverse mortgage on your primary residence, repayment is not due until the home is sold, the last borrower passes away, or permanently leaves the home. Borrowers also must keep the home in good condition, pay property taxes, and keep homeowner’s insurance coverage to avoid the loan becoming due and payable.

A reverse mortgage is a unique mortgage designed for homeowners 62 and older. You may enjoy access to part of the value of your home and the freedom and comfort of the home you’ve known for so many years. It’s your home, now you can put it to work for you.

Features, Benefits, and QualificationsFeatures and Benefits of Reverse Mortgages

Reverse mortgage borrowers retain ownership and title to their home. It’s yours just as it was before, but now you may benefit from the equity that’s been building in your home for years. In addition, HECM (Home Equity Conversion Mortgage) reverse mortgage loans give you peace of mind since your home and property are the only assets that secure the loan. 

HECM Loans are insured by the Federal Housing Administration (FHA). FHA requires a Mortgage Insurance Premium (MIP) to be collected at closing and during the life of the loan. These premiums are charged to the borrower's loan balance. The upfront Mortgage Insurance Premium (MIP) is calculated using your home's appraised value or a maximum of $970,800 (the 2022 national lending limit cap) and is charged at closing. The ongoing FHA insurance premiums are calculated using each month's outstanding loan balance.

This insurance provides the following protections and peace of mind for borrowers and their children:

In order to retain the home when the reverse mortgage becomes due, the heirs may choose to keep the home by paying 95% of the home's appraised value, less customary closing costs and real estate commissions.

A reverse mortgage allows you to draw from the value in your home without having to sell it.

You live in a home that you’ve watched increase in value for years. You may find it difficult to keep up with bills and healthcare expenses. You’re faced with a dilemma: sell the house—your home, which really doesn’t have a price tag—or continue to live in it and watch your financial burden increase. Now imagine this dilemma resolved.

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

Enter The Reverse Mortgage

A reverse mortgage loan allows you to draw on a portion of the value in your home without having to sell it and may allow you to receive monthly cash flow payments. The loan is repaid when you sell your home, the last borrower passes away, you no longer live there as the principal residence, or if you fail to comply with loan terms.

You can use the loan proceeds virtually any way you wish: to enhance and extend your retirement, make home improvements, pay bills, etc. It’s all up to you.²

As a protection, all those seeking a reverse mortgage are required to obtain counseling (from an independent HUD-approved third-party counselor). While proceeds from a reverse mortgage are not subject to personal income taxation, borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal².

¹This advertisement does not constitute financial advice. Please consult a financial advisor regarding your specific situation. There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrowers are still responsible for paying property taxes, homeowner’s insurance and maintaining the property to HUD standards. Failure to do so could make the loan due and payable. Credit is subject to age, income standards, credit history, and property qualifications. Program rates, fees, terms, and conditions are not available in all states and subject to change.

²Borrowers should seek professional tax advice regarding reverse mortgage proceeds and consult with their benefit agency.

 

 

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