Home equity conversion mortgage (HECM), or popular as reverse mortgage, is a type of home loan wherein loan payments are based on the value of the borrower’s home or property. Majority of senior citizens acquire this type of loan that allows them to have the money to build a new home, buy another property, pay off a previous loan or invest the money.
Rules for HECM slightly vary with different territories. But in the United States, some of the requirements for eligibility include:
- The borrower must be at least 62 years of age,
- The borrower must occupy the property as his/her principal residence, and
- Any mortgage on the property must be small enough to be paid off during reverse mortgage settlement.
To learn more about eligibility and reverse mortgage, check the government portal here.
HECM is suitable for seniors who have limited retirement assets, since this type of loan can provide them flexibility with their finances. HECM also eliminates monthly loan payments because it doesn’t require the borrower to do so.
We at IFundRE, can assist you in any aspect, from advice, property appraisal to choosing the right loan product that’s perfect for your needs. Get in touch with our loan consultants today.Apply Now