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Frequently Asked Questions
Frequently Asked Questions
What is a HECM?
A HECM is a special type of home loan that lets the homeowner turn the equity of their home into cash, either in the form of a monthly payment, line of credit, or a lump sum. No repayment is required until the borrower no longer uses their home as their principle residence. This Program is Federally Insured and gives you the money you need today to help improve your lifestyle. It lets you do the things you have always dreamed of doing!
How do I know if I qualify?
To be eligible, you must own and reside in your home and be a minimum of 62 years of age.
How much money can I get?
That depends on your age, the home’s value and the equity in the home. A Senior Lending Advisor can provide you with your exact benefits.
Do I have to make monthly payments?
No. You will NEVER have to make a monthly mortgage payment for as long as you live in your home.
Do I need a minimum income level or credit rating to qualify?
No. Qualification is never based on your credit, income or even medical conditions.
Will I still own my home?
Absolutely. You will always retain 100% ownership and title to your home as you do now.
Do I have to pay taxes on the proceeds?
No. The IRS does not consider proceeds from a HECM as income; therefore, it is not taxable.
Does a HECM affect my Social Security & Medicare Benefits?
No. Since the IRS does not consider HECM proceeds as income, it will not affect any Social Security or Medicare benefits.
How do I receive the Proceeds?
The proceeds of your loan can be taken as a lump sum payment, monthly income, a line of credit you can draw upon, or any combination of the three.
Does the lender take my home when I die?
No – Absolutely not – When the last surviving spouse passes away the loan becomes due. The heirs or estate can either sell the house or just pay off the loan and keep the property. The house stands for your debt on this loan – no debt could ever be passed to your children or heirs from a HECM.
What would happen if one spouse passed away?
As long as one spouse is living in the house as their primary residence and is on title and loan, no repayment of the loan is due. Only when none of the borrowers are living or using the house as their primary residence does the loan become due.
Can I do a HECM if I already have a mortgage on my house?
Absolutely! Though the proceeds from the HECM would be used to pay off your existing mortgage first the remaining equity would be given to you. There are no payments with a HECM, so you will save money each month.
Why is a HECM better than a home equity loan?
Two reasons – First, there are no payments with a HECM and second there is no income or credit qualifying for a HECM.
How does this affect my heirs?
A HECM is a great way to share some of your children’s inheritance with them now, while you are still alive and can enjoy it with them.
Under what circumstances should I not consider a HECM?
If you plan to leave or sell your home within the next 2 years, a HECM may not be a very worthwhile option for you.
