HECM (Reverse Mortgage): Who Qualifies and What You Get
Learn how a HECM reverse mortgage allows homeowners aged 62+ to access home equity without making monthly loan repayments.
A HECM, or reverse mortgage, is a way for homeowners to turn part of their home's value into cash without having to make monthly loan payments.
Who it's for
This scheme is for homeowners who are at least 62 years old and have significant equity in their home.
What you get
You gain access to the equity built up in your home in the form of cash. Unlike a standard mortgage, you are not required to make monthly repayments on the loan.
What it costs you
There are high closing costs and interest fees associated with this option. Additionally, because the loan balance grows over time, it reduces the inheritance left to your heirs.
The catch to know
While you do not have to make monthly loan payments, you are still responsible for your property taxes and home insurance. If you fail to pay these, you could face foreclosure.
How to apply
- Confirm you meet the minimum age requirement.
- Check your home's equity to ensure it is sufficient.
- Consult with a professional to understand the specific costs and terms.