What is a reverse mortgage?
The official name for a reverse mortgage is a Home Equity Conversion Mortgage (HECM – referred to as a heck-um). A HECM is the only reverse mortgage insured by the U. S. Federal Government and is only available through an FHA (Federal Housing Authority) approved lender – like Royal United Mortgage LLC!
A HECM allows people over age 62 to borrow against the equity in their home. Borrowers pursue a HECM for various reasons, including:
- to generate a monthly income;
- to provide a line of credit for large periodic expenses; or
- to eliminate monthly mortgage payments.
As long as the home is your primary residence and the obligations of the mortgage are met, an FHA-guaranteed HECM does not require repayment. The lender is paid the principal, plus interest, when the home is sold. The remaining value goes to you or your heirs.
In order to obtain a HECM, there are some requirements. You must:
- be age 62 or older
- own the property outright or have a small mortgage balance
- live in the property as your primary residence
- not be delinquent on any federal debt
- participate in a session with an approved HECM counselor
There are some costs to obtain a HECM and there are a variety of options to pay them or to include them in the loan balance.
There are lots of options and understanding all of them in order to make the best decisions for your situation can seem daunting.
That’s where Royal United Mortgage LLC comes in. It is the mission of our Loan Advisors to provide all the information you need and take the time to explain it and answer all your questions – no matter how many questions you have or how long it takes to answer them.
We want to help you find the financial solution that fits your needs for today – and for tomorrow.
-Elaine of the Royal United Mortgage LLC Blog Team