Reverse Mortgage - Refinance and Purchase

What is HECM for Refinance?

You’ve worked hard to pay the mortgage on your home. With a reverse mortgage loan you can receive a portion of the equity that you earned. A federally insured HECM Reverse Mortgage can help you unlock that equity and increase your monthly cash flow with no monthly mortgage payment. With a Reverse Mortgage you can:

• Access the equity in your home and stay in your home as long as you want. When you move or pass away, or if you fail to pay property taxes or home owners insurance or otherwise fail to comply with the loan terms, you could be forced to repay the loan.
• Receive an annuity-like stream of cash flow for as long as you, the borrower(s) remain in the home, maintain the home, continue to stay current with property tax and homeowner's insurance payments and otherwise comply with the loan terms.
• Some borrowers elect to receive a lump-sum payment rather than the monthly payments.
• Let us help you compare different options so you can make the best choice for your situation.

What is HECM for Purchase?

A Home Equity Conversion Mortgage (HECM) for Purchase is a Reverse Mortgage that allows borrowers age 62 or older purchase a new principal residence using loan proceeds from the reverse mortgage.

• Repayment Requirements
  • HECM for Purchase: Flexible repayment feature — You may choose to repay as much or as little as you like each month, or make no monthly principal and interest payments. The flexible repayment feature makes it easier for you to afford the home you really want, preserve more savings and retirement assets, and improve cash flow. As with any mortgage, you must keep current with property-related taxes, insurance and maintenance as part of your ongoing loan obligations. Repayment is generally required once you sell the home, pass away, move out or fail to meet your loan obligations. 
  • Traditional mortgage: Monthly principal and interest payment required. Builds equity as the loan is paid down. 
• Down Payment Amount
  • HECM for Purchase: Required down payment between approximately 29% and 63% of the purchase price, depending on your age or the age of an Eligible Non-Borrowing Spouse, if applicable. The rest of the funds for purchase come from the HECM loan. This allows you to keep more assets to use as you wish, as compared to paying all cash, while still having the flexibility of no required monthly mortgage payments.

  • Traditional mortgage: Typically allows for a smaller down payment. 

• Protection Against Owing More Than Home is Worth 
  • HECM for Purchase: A Federal Housing Administration (FHA)-insured program, HECM for Purchase, has a non-recourse feature, which means you can never owe more than the home is worth when the loan is repaid. The home is the only source of repayment, regardless of the loan balance at maturity. 
  • Traditional mortgage: Most do not have a non-recourse feature. Since home values can decline, you could owe more than your home is worth. 

Want to learn more about the costs when obtaining a Reverse Mortgage? Click the following link for our next topic: What are the Costs of Getting A Reverse Mortgage Loan?

Our no credit inquiry Reverse Mortgage QuickQuote is a great place to begin and includes the most recent rates and tables to properly calculate all available options for you. Just click the "Begin Here" button below and we'll get right to work for you.