Are you a homeowner nearing retirement age, and looking for a way to supplement your income? If this situation applies to you, you may want to consider applying for a Home Equity Conversion Mortgage. An HECM is a type of reverse mortgage program that transforms a home’s equity into credit or cash for the borrower and requires no monthly loan payments. If you are located in the areas of Hawaii, Illinois, or Ohio, Dan Turner of Geneva Financial can help determine if an HECM loan would benefit you.

The Basics of HECM

An HECM is a type of reverse mortgage, which is basically a loan taken out against the built up value of your home. It allows borrowers that are 62 years of age or older to withdraw a portion of the equity in their home and use it as cash or credit for any purpose. The money from this type of loan is typically used to eliminate existing mortgage payments or other debts, used to make home improvements, or used to supplement retirement income.

A Home Equity Conversion Mortgage is considered a non-recourse loan, and is made available by U.S. Department of Housing-approved lenders. This loan is insured by the federal government, The Federal Housing Administration, (FHA), finances HECM and provides insurance on the mortgages. There are several benefits to obtaining an HECM, most importantly because you can get rid of your traditional mortgage payments and access your home’s equity while still living in your residence. Also, since it is insured by the government, that makes it a safer option and the loans often come with lower interest rates.

HECM Qualifications

In order to qualify for a Home Equity Conversion Mortgage, there are several requirements to consider, including:

• You must be 62 years or older
• You must participate in an information session led by an HECM counselor
• You must live on the property and have it be your primary residence
• You must own your property, or at least have paid off a majority of the mortgage
• You cannot be delinquent on a federal debt

In addition to the personal qualifications, your property also must meet one of these three standard requirements:

• The home must be a single family 2-4 unit property
• It must be a home manufactured to meet FHA requirements
• It must be a condominium approved by the U.S. Department of Housing and Urban Development, (HUD)

Deciding If HECM Is Right For You

A Home Equity Conversion Mortgage has several positive benefits, but it may not be the right type of loan for every borrower. Dan Turner at Geneva Financial can work closely with you to understand the process of obtaining this type of loan, and if it would be the most beneficial mortgage for your unique situation.  Contact us today for a consultation if you are looking for a home in the regions of Hawaii, Florida, California, Washington, Illinois, or Ohio.