In the past, HECM (home equity conversion mortgages) were referred to simply as reverse mortgages. Due to unethical marketing practices and loan features which were not consumer friendly the loan product received a bad reputation and its popularity waned.
Today, the HECM has seen a resurgence in popularity due to changing demographics, changing perceptions of the loan and new consumer protections.
You are eligible for a reverse mortgage if:
- You are 62 years of age or older
- You own your home and use it as your primary residence
- The house is single family, multi-family (up to 4), or an approved condominium or manufactured home
- You own your own home free and clear or only have a small amount left to pay on the existing mortgage
- Your home is in good condition prior to taking out the loan
You may want to consider a reverse mortgage if:
- You need to utilize home equity as part of an estate plan
- You need or expect to need costly in-home private duty caregiver services.
- You or your spouse need long-term care in a care facility and one spouse will be remaining in the home
While the HECM loan rules are set by the federal government and insured by the federal government, the loans are originated by private lenders. If you are considering a HECM loan speak with your Care Advocate. They can advise which HECM lenders have the best reputations for communication, professionalism and low loan fees.