Settle in comfortably for retirement
Home Equity Conversion Mortgages
For Whatever Is Important To You.
Access a portion of your home’s equity tax-free and stop making principal & interest payments.
Reverse Mortgage Programs
A Home Equity Conversion Mortgage (HECM) is commonly known as a Reverse Mortgage. It is insured by the Federal Housing Administration (FHA) which enables seniors to access a portion of their homes equity as tax-free cash without making principal & interest mortgage payments. There are 5 basic requirements that need to be met:
- Age – Borrowers must be at least 62 years old
- Property – Single family residence, manufactured home, FHA approved condo, or 2-4 unit family residence
- Residence – Live in the home as your primary residence
- Equity – Home must have sufficient equity to payoff existing mortgage and other liens
- Financial Assessment – Borrowers must pass residual income analysis and light credit evaluation
Getting Through the Process
- Client Visit & Education — Face to face meeting to review quote & counseling package in addition to answering questions
- Counseling — Senior will choose & schedule appointment with counseling agency from HUD approved list
- Application — Disclosure package generated for client to review & sign
- Processing — Order title report, credit, FHA case assignment and appraisal
- Submission — Loan package submitted to underwriter for review and conditional approval
- Closing — Sign final loan documents
Types of Reverse Mortgages
Home Equity Conversion Mortgage (HECM)
A Home Equity Conversion Mortgage (HECM), commonly referred to as a “Reverse Mortgage,” allows homeowners 62 and above to convert their home equity into cash and not have to sell their current home. An added benefit of a Reverse Mortgage is the cash received is tax-free. There are a variety of disbursement options available to homeowners.
HECM for Purchase (H4P)
The HECM for Purchase Program (H4P) lets homebuyers 62 and above combine the proceeds of the sale of their current home with a down payment to purchase a new home and not make loan payments as long as they live there (conditions apply, contact an Advantage Mortgage Loan Officer for details).
- Lump Sum – Only available with fixed-rate HECM
- Tenure – Fixed monthly payments for as long as the senior lives in the home as a primary residence
- Term – Fixed monthly payments for a specified period of time
- Line of Credit – A standby line of credit to access funds when needed
- Lump Sum – A one-time payment made to the senior at closing
- Combination – You can choose a tenure or term payment in addition to a line of credit and lump sum
Reverse Mortgage PROS
- Eliminates your existing principal & interest payments
- You stay in your home & maintain title
- Loan proceeds are tax-free and can be used any way you choose—consult your financial advisor
- Heirs inherit any remaining equity after paying off HECM loan
- The HECM loan is FHA-insured
Reverse Mortgage CONS
- The loan balance will increase over time
- Fees are typically higher than a traditional forward mortgage
- You must continue paying property taxes & homeowners insurance
- Value of inheritance may decrease over time as proceeds are spent and interest accrues on loan balance
- Reverse mortgages are not well understood
Is a Reverse Mortgage right for you?
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Equal Housing opportunity. Credit on approval. Terms subject to change without notice. Not a commitment to lend. Contents not provided by, or approved by FHA, HUD or any other government agency. All potential tax benefits should be verified with a professional licensed tax advisor. NMLS Consumer Access
At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; the loan balance grows over time and interest is charged on the outstanding balance; the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; interest on a reverse mortgage is not tax deductible until the borrower makes partial or full re-payment.
Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates and conditions are subject to change without notice. Some products and services may not be available in all states.