What Is Hecm Reverse Mortgage
What is important for the borrower is, that the HECM reverse mortgage is safe
, because it is a product of the federal government. This lender cannot be a scam and it is insured by the official insurance program.
1. HECM Reverse Mortgage Is The Lowest Cost Multipurpose Loan.
Usually these seniors have limited funds in use, so it is important to notice that the HECM reverse mortgage is the lowest cost multipurpose program and in many cases these loans can provide the biggest total cash benefits.
2. The Government Insured FHA Program.
This is very important for the borrower. The government ensures, that you will get all the benefits due to you as long as you live. This means also that the bank will get the full payment of your loan balance, even in cases that it exceeds the value of the home.
Also you will never be forced to sell or vacate your own home, even in the cases when the loan balance is over the value of the home. This also means that you, your heirs and the property cannot owe more than the value of the home, so your other assets will never be used to pay the reverse mortgage loan.
3. The Tax Free Loan.
Actually the FHA gives instructions to the lenders how much loan they can give tax free based on your age, on the appraised value of the home and on the interest rates. The HECM program will limit the loan amounts and FHA guarantees that the lenders will meet their obligations.
4. The Home Ownership.
One of the biggest advantages is that the HECM guarantees, that you will keep the ownership of the home for life. If there will be other borrowers, altogether three are allowed, they all must meet the qualifications and be owners of the home. You may sell, move, or repay your HECM at any time you wish with no prepayment penalties.
5. The Position Of Your Heirs.
Your heirs will inherit the home and it is their decision, how they want to pay the HECM. All equity, including the home appreciation, will go to the heirs according to the will or the Living Trust.
by: Juhani Tontti
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