The Five Big Reasons Seniors Should Consider a HECM Loan

/ / Reverse Mortgage

For most retirees, a financial planner is a necessity for figuring out how to comfortably live on their savings after they quit working. But often, there are times when even financial planners need to turn to professionals like us for help to ensure their clients are able to live comfortably in their retirement. The most common reasons a Financial Planner/Advisor contacts us are:

Their clients are withdrawing from their investment too soon due to rising cost of living. 

Their clients started saving too late, and don’t have enough funds to live on. 

Their clients want to upgrade their home to be more senior-friendly to age in place.

Their client wants to downsize to a more manageable home.

These issues all have the same answer: a HECM loan.

A Home Equity Conversion Mortgage (HECM) is a reverse mortgage exclusively for people over the age of 62. This loan allows homeowners to turn some of the equity in their home into cash while being able to remain on title and can stay in their home. It’s also the only reverse mortgage that’s insured by HUD.

Five benefits of getting an HECM:

  1. Have cash available to use in an emergency, or to fund upgrades to your home so you can age in place
  2. Monthly supplement to your income from the equity you built up in your home. It’s time for your home to pay you back.
  3. Preserve your savings by utilizing the loan proceeds from your home equity.
  4. Pay off existing mortgage to improve cash flow. There is no monthly principal and interest payment required on a reverse mortgage. This allows you to continue to save more by eliminating the mortgage payment expense. You just pay your taxes and insurance.
  5. Use a HECM for Purchase to buy a new “right sized” home. Reverse Mortgage funds plus funds from selling departing home, equals total purchase with no monthly P&I payments required. Win Win for all.

We’re here to help. See our full explanation of an HECM loan here, or better yet, give one of our specialists a call to go over whether a reverse mortgage is right for you.