A reverse mortgage, also known as Home Equity Conversion Mortgage (HECM) has helped thousands of seniors stay in the home they love and own their home with ever having to make another monthly mortgage payment. How? A reverse mortgage eliminates your mortgage (if you have one) and any remaining equity can be used for anything you want. With a reverse mortgage you have options to choose from. Each option is different, and each one offers different benefits which you can use to work for you. Here are your two options with a reverse mortgage:
The HECM Fixed rate option is designed for people requiring a greater amount of money available to them to pay for mandatory obligations like their current mortgage, property liens, repair requirements and reverse mortgage loan closing costs. You will receive your money in one lump sum at closing and the low fixed rate remains the same through the life of the loan.
HECM Line of Credit
The HECM Line of Credit rate reverse mortgage is available to everyone that qualifies and offers different ways to receive money available to you. One option offers lower closing costs by limiting your initial money disbursement for the first year based on the FHA pre-determined limit. Other options include receiving your money in smaller amounts monthly, a full draw on your line of credit at closing, accessing your line of credit when you need to or any combination of these. Another great benefit of this option is your unused line of credit may grow over time.
With the HECM Line of Credit option your proceeds could grow over time. That means if you do not use all of your Line of Credit it can grow based on the interest rate. You may be wondering what makes a reverse mortgage line of credit different from a traditional home equity line of credit. The biggest difference is with a reverse mortgage line of credit you are not required to make any kind of payment to the line of credit. With a traditional line of credit a monthly payment is required or the loan could be called due. Another benefit to a reverse mortgage line of credit is the reverse mortgage pays off your current mortgage. So it eliminates one bill and gives you a line of credit to use. With a traditional line of credit you have a regular house payment then of course the payment to the line of credit.
Overall biggest benefit many seniors enjoy the most from the reverse mortgage is no longer worrying about having to make a monthly mortgage payment. On top of that they have the peace of mind of knowing they can stay in the home they love for the rest of their life.
If you are considering a reverse mortgage but are not sure where to start give One Reverse Mortgage a call. We will discuss with you your financial goals and help you to determine if a reverse mortgage makes sense for you. We have worked with thousands of seniors. From the man who was able to retire 10 years earlier to a couple who know have the ability to travel to see friends and family we have helped all different kinds of seniors.