Boomers & Seniors

posted on 02.09.2016 by admin

Some financial planners and economists say that retirement planning is one of the most difficult things to get right. When Boomers and Seniors were asked what concerned them most about retirement almost unanimously they responded “fear of outliving their savings”. Retirement should be a time to reap the rewards of a long life of hard work. But all too often concerns over dwindling savings, rising costs, and unexpected expenses put a damper on or end realizing ones retirement dreams. There is an answer. It’s a Home Equity Conversion Mortgage (HECM).

What’s a HECM?

It’s a Federally Insured (FHA) Loan enacted by Congress in 1988 to allow individuals 62 and older to use their housing wealth to have a successful retirement:

  • Without having to make any Monthly Loan Payments
  • Without giving up Ownership or Title to the home
  • Without having to Repay More than the home is worth

What can a HECM be used for?

  • Eliminate Monthly Payments (Pay off existing mortgage or other debts)
  • Source of Tax-free Cash to supplement other Retirement Income
  • Standby Line of Credit (Tax-free cash for future needs or emergencies)
  • Pay long-term Care Insurance Premiums
  • Purchase a new home with as little as 40% down
  • For Travel or to just have fun in Retirement – Do all those things that make life worth living.

How Much Can You Receive?

  • The amount you receive is based on:
    • The Age of the youngest borrower
    • The Value of the property (up to a maximum of $625,500)
    • The Interest Rate associated with the program

How Proceeds Can Be Received?

  • Lump Sum
  • Line of Credit
  • Monthly Tenure Payments (life of the loan)
  • Monthly Term Payments (limited and adjustable)
  • Combination of the above

When Does the Loan Get Repaid?

  • The Loan is due and payable when the last surviving borrower permanently leaves the home or does not comply with other obligations of the loan such as remaining current with the payment of Real Estate Taxes, HOA/Condo Fees, and Homeowner’s Insurance or fails to maintain the property.
  • At that time, whatever proceeds were advanced to borrower plus accrued interest and any other fees are due and payable
  • 100% of the remaining equity from the sale of the home is passed on to the borrower, their heirs or their estate

Contact us to get the full story and see how a Home Equity Conversion Mortgage can make a real difference in your life.