Reverse Mortgage or Home Equity Conversion Mortgage (HECM)

By Grace

Things you need to know about A reverse mortgage or home equity conversion mortgage (HECM). Learn reverse mortgage in a simple way by reading these facts.

Here are the basic things you need to know about reverse mortgage. You will probably know how old do you have to be to get a reverse mortgage, what is it and how does it worl. Let us also find out if reverse mortgage are taxable income or not.

Most Expensive Forms of Credit

“A reverse mortgage is more debt and one of the most expensive forms of credit you can get.” – Carolyn Rosenblatt (Forbes.Com)

Borrowers Responsible

“Borrowers are still responsible for property taxes and homeowner’s insurance.”  – Wikipedia

Eligibility

“To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older” — Portal.Hud.Gov

Does Not require Payment

“A reverse mortgage loan generally does not require repayment until the last homeowner has passed away or moved out of the property.” – Reverse.Org

Reverse Mortgage or Home Equity Conversion Mortgage (HECM)

Image Credit: Tuba Squad on CC 2.0 via Flickr

FHA Program

The Home Equity Conversion Mortgage (HECM) is Federal Housing Administration’s (FHA) reverse mortgage program which enables you to withdraw some of the equity in your home. – –  Benefits.Gov

Tax Implications

As far as taxes go, there are pros and cons to reverse mortgages. – – Nolo.com

Sales People Might Suggest

“Some reverse mortgage salespeople might suggest ways to invest the money from your reverse mortgage – even pressuring you to buy other financial products, like an annuity or long-term care insurance. Resist that pressure.”

“Interest rates may change over time. Most reverse mortgages have variable rates, which are tied to a financial index and change with the market.”

Source: https://www.consumer.ftc.gov/articles/0192-reverse-mortgages

Complicated

“It can complicate one’s wish to keep the house in the family.” – – Donna Fuscaldo, BankRate.Com

No Payments are Due

“A reverse mortgage is a loan that allows a homeowner to convert home equity into cash. No repayments are due as long as you live in the house.” – Jane Bryant Quinn on AARP.org

Thought for the Day:

“Bad debt is debt that makes you poorer. I count the mortgage on my home as bad debt, because I’m the one paying on it. Other forms of bad debt are car payments, credit card balances, or other consumer loans.” — Robert Kiyosaki

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