Many years ago in 1988, anticipating the needs of today's seniors, the Reagan Administration came up with the "Home Equity Conversion Mortgage Insurance Demonstration". The H.E.C.M. allows homeowners to receive supplemental income from the equity built up in their home. This Federal Housing Administration program includes Mortgage Insurance Protection that is key to this program. This insurance protection provides homeowners with safety and security of knowing that they can live in their house forever without a mortgage payment. Their house is the only collateral, so the balance owed will never exceed the home's value which protects the heirs to their estate.

This program isn't new but was slow to catch on until recently. Now more and more senior homeowners are telling me their reasons for using the H.E.C.M. program are:
o Stocks, pensions, and 401K's won't recover soon enough.
o Mortgage balance too high, and home's value declining.
o Huge expense of in-home health care.
o Being forced into early retirement.
o Extremely high utility and prescription bills.
The Home Equity Conversion Mortgage (H.E.C.M.) or more commonly known today as a Reverse Mortgage is basically that; you REVERSE the mortgage. If you still have a mortgage balance, then the Reverse Mortgage proceeds go to pay it off first. You can elect to receive a set monthly income payment for life, or a lump sum, or a combination. The funds left in the line of credit are similar to a savings account, but the Reverse Mortgage pays higher interests, and the full line of credit is government protected and not subject to taxation.
To many of my clients, eliminating their mortgage payment means a huge raise in their monthly income. You remain on the title to your house, exactly the same as a traditional mortgage. The Reverse Mortgage is paid back when you move (you keep the difference) or pass away (your family or estate sell the house within a year and keep the difference).
*No out of pocket expense.
*Must be a homeowner age 62 or above.
* No credit & little income requirement.
*Must have minimum of 25-50% equity based on age.