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Home Equity Conversion Mortgage (HECM) Basics

What you need to know about Home Equity Conversion Mortgages.

A Home Equity Conversion Mortgage (HECM) allows homeowners 62 and older to access a portion of their home equity to use in retirement. Only HECMs are insured by the Federal Housing Administration (FHA), and the agency sets the maximum loan amount annually. Reverse Mortgages are available in certain states for those 60 and older and offer higher loan amounts than HECMs.

Benefits

With a CrossCountry Mortgage HECM you can:

  • Stay in your home — you don’t need to sell it to access your funds.
  • Eliminate your monthly mortgage payment (you must still pay your property taxes and homeowners insurance).
  • Choose an adjustable or fixed-rate loan.
  • Receive funds from an adjustable rate mortgage as a line of credit with a growth factor, lump sum, monthly payment, or a combination.
  • Make the equity you’ve built up over years of mortgage payments work for you.
  • Maintain or establish financial self-reliance.

Borrower Eligibility

To qualify for a HECM you must:

  • Be at least 62 years old.
  • Live in the home as your primary residence.
  • Meet credit and income guidelines.
  • Have a current mortgage balance that’s low enough to be paid off with the HECM proceeds.

Property Eligibility

The home must meet FHA standards and be one of the following:

  • Single-family home
  • 2-4 unit home
  • FHA-approved condominium unit
  • Manufactured housing unit (on a permanent foundation)

Important Reminders

MORTGAGE COUNSELING

You must complete HUD-approved counseling (available at little or no cost). This will help you decide if a HECM is right for you.

REPAYMENT

A HECM provides you with funds for as long as you live in the home. There’s no repayment until you pass away, sell your house, or move out.

RESPONSIBILITIES

While you don’t have to make monthly mortgage payments, you’re still responsible for property taxes and homeowners insurance. You must also keep the home in good condition.

PROCEEDS

The amount you can borrow is determined by the age of the youngest borrower, the interest rate, and the maximum loan amount.

You’ve worked hard for your home. Now let your home equity work for you with a HECM.

If you have additional questions about HECMs, your licensed CrossCountry Mortgage loan officer is here to help. Call or email today for more information about this very important home financing option.