Reverse Mortgages are how to unlock financial peace in retirement
Discover how retirees aged 62+ can attain stability through HECM Reverse Mortgages and ease financial worries more effectively.
The Power of HECM Reverse Mortgages:
- What are they? – HECM’s are a financial tool that help senior homeowners to convert home equity into accessible cash and provide relief without the burden of a monthly mortgage payment. The homeowner continues to pay property taxes and insurance but the mortgage payments are deferred until the homeowner has passed away, moved from the home or sells the home.
- Who is eligible? – To Qualify for a HECM there are three primary requirements
- At least one homeowner must be 62 or older.
- The home must be used as a primary residence.
- Homeowner must meet the equity requirement which can vary based on the age of the youngest borrower and current interest rates. Typically 45% – 65% equity is required.
Key Benefits for Retirees:
- Financial Flexibility: The ability to pay off an existing mortgage. Draw a lump sum of money at closing or maintain a line of credit of available funds for future draws.
- Eliminate Monthly Mortgage payments: Monthly mortgage payments are never required as long as the homeowner lives in the home and pays basic expenses like taxes and insurance.
- Homeownership: The homeowner continues to own the home and maintains all rights as the homeowner.
- Combatting inflation: HECM’s protect seniors form the devastating effects of rising inflation.
Considerations and Cautions:
- Loan Repayment: The Mortgage is repaid from the home’s equity when the homeowner passes away, sells the home, or no longer lives in the home.
- Effects on the Family: the heirs of the homeowner are never responsible for the HECM. The equity in the home will pay off the mortgage when the homeowner passes away.
- Impact on home value: A home’s value fluctuates with the local real estate market which historically has averaged roughly 5% appreciation since the 1970’s. The home’s equity could decrease over time depending on the appreciation rate and interest rates on the mortgage.
HECM Reverse Mortgages help retirees to unlock home equity, ensure security during unsecure times and live with more peace of mind.