Home Equity Conversion Mortgage (HECM) is Federal Housing Administration’s (FHA) reverse mortgage program which enables an older homeowner to withdraw some of the equity in their home in the form of monthly payments for life or a fixed term, in a lump sum, or through a line of credit.
Also known as a “reverse mortgage”, this type of mortgage enables older homeowners to convert the equity they have in their homes into income. This loan type is designed specifically for people that have little income but a great deal of equity in their home (i.e. retired people).
A homeowner that is 62 years of age or older that has paid off their mortgage or paid down a significant amount of their mortgage and is currently living in the home.
A person has to:
In order to get approved for an HECM, a person must meet the borrower requirements along with the following:
Once a borrower has been approved for HECM, they need to determine their payment options based on their loan type.
Adjustable Interest Rate Mortgages
Options for payment for an ARM include the following:
Fixed Interest Rate Mortgages
The amount a borrower can take out with an HECM depends on the following:
A home equity conversion mortgage can be paid for by financing and paying it off with proceeds from your loan. This means a borrower does not need to pay for it out of pocket. However, there are fees and charges that will need to be paid at time of the loan closing or throughout the life of the HECM loan. Contact Meridian Mortgage to learn more.
For more information on applying for an HECM loan, contact Meridian Mortgage at 317-968-9500 or contact us online.
Meridian Mortgage Solutions is a subsidiary of Endeavor Capital, LLC Licensed through the Indiana Department of Finance and Insurance. License #17519 & 17520, NMLS#222524
Endeavor Capital, LLC and its DBA's are not acting on behalf of or at the direction of HUD/FA or the Federal government.
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