The HECM loan is an FHA-funded loan that is intended for senior individuals over the age of 62 who have all or substantial equity in a home. It is a type of a reverse mortgage in which instead of making payments to transfer the home equity in your name, you receive payments and transfer the home equity to the lender.
While the reverse mortgage loan option allows individual to supplement the income, it is not suitable for everyone. In this article we will take a look at the persons for whom a reverse loan mortgage is the best option.
HECM Loan – Who Should Apply?
Financial experts suggest that HECM loan should only be applied by those senior individuals who are short on cash flow. By applying for the loan, an individual can receive a lump sum or monthly payment that can make up for the shortfall in the cash.
The amount a person will receive depends on the fair market value of the home, the age of the person, the mortgage rates, and the maximum loan amount in the county. Life expectancy of the borrower also determines the amount paid to the borrower.
For instance, a person aged 62 who has $150,000 equity in the home could borrow $110,000. For the same equity, a 72-year old person could be able to borrower $149,000. You can use a quick HECM loan convertor to find out how much loan you can receive.
The HECM reverse mortgage loan is ideal for senior citizens who have stopped working and need to supplement their monthly income. The loan option is also ideal for persons who need to pay costly medical bills for medicines, surgery, or long-term care.
To get free consultation about the HECM reverse mortgage, you can contact Longbridge Financial by calling 855-523-4326, or visiting here.
