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NMLS#1459552

Per the Federal Trade Commission (FTC), HECM loans work by allowing homeowners to convert a portion of their house's equity into cash without having to sell the home or make regular monthly payments1

Unlike a classic forward mortgage, where the borrower begins repaying the mortgage right away, borrowers do not have to pay off funds received through a HECM until after the final borrower no longer lives in the house2. There are no monthly loan payments required1.

Longbridge

LongbridgeHow Can You Use HECM Cash?

The proceeds you receive from a HECM loan can be utilized for anything you’d like. Longbridge has several ways for how you can receive your money and how you choose to use this money depends completely on your personal financial situation and retirement goals. If you have an existing mortgage on your Indian Land home, the cash from the Home Equity Conversion Mortgage is first used to repay the loan. The remaining cash can be taken in any of the following distribution methods:

  • Consistent, tax-free monthly payments.5
  • A one-time payment, income tax-free.5
  • A credit line, as a “safety net” for future use if needed.
  • A combination of these methods.

Each homeowner is unique, and our clients have found creative ways to use a Home Equity Conversion Mortgage to improve their income, lifestyles, and monthly cash flow. These are just a few examples of how HECM loans work to your benefit:

  • Reduce or eliminate debt or credit card balances.
  • Help with healthcare costs, making "aging in place" easier.
  • Support a family member with life expenses, like a down payment on a home or college tuition.
  • Keep additional cash available to cover everyday expenses and bills.
  • Save funds to assist in paying for long-term care down the road.
  • Make updates, repairs, or modifications to your house to live more comfortably.
  • Establish a line of credit for occasional expenses or emergencies.
  • Lower your total taxable: prevent having to make taxable withdrawals from IRA, 401(k), or other retirement plans by replacing the cash with income tax-free HECM funds5.
Longbridge

Longbridge Can My Heirs Keep my Home?

Yes. One of the benefits of HECM loans is that your children have the option to get their own financing, repay the reverse mortgage, and keep the house in the Indian Land area. However, the funds to repay the reverse mortgage most often come from the sale of the house itself, once the home passes to your heirs.

In the rare event that the total amount of the reverse mortgage repayment is more than the value of the home, neither you nor your heirs would be required to repay the difference. Insurance from the FHA is a part of every Home Equity Conversion Mortgage, so it would cover any shortfall.

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