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    Learn how a reverse mortgage can save your home!

National Association of Mortgage Bankers

National Reverse Mortgage Lenders Association

Reverse Mortgage Company
Equity rich? Cash poor? See how a Reverse Mortgage can help!

Types of Reverse Mortgages

HECM: Home Equity Conversion Mortgage

HECM: Home Equity Conversion MortgageThe HECM is a federally insured Reverse Mortgage. Over 95% of all Reverse Mortgages fall into the HECM category. The Federal Housing Administration (FHA) sets limits on how much a HECM Reverse Mortgage lender may lend to you.

A credit line account of a specific dollar amount that you control. With this option you decide when to make a withdrawal from this account and how much to withdraw. The UNUSED portion of the credit line will grow over time, meaning that the amount of money available to you increases until you withdraw it; or the HECM program has a wide array of how money can be advanced to you. You can choose:

  • (1) -a single lump sum; or
  • (2) -a credit-line account of a specific dollar amount that you control, whereas you may decide when to make a withdrawal from this account and how much to withdraw. The credit-line will grow over time, meaning that the amount of money available to you increases until you withdraw it; or
  • (3) -you may elect a monthly advance for a specific period of time, or for as long as you live in your home; or
  • (4) -you may combine any of these options

For a small fee, you do have the chance to change how you originally choose your advance and may do so until the Reverse Mortgage is satisfied.

The amount of money that you may get depends on your age, current interest rate and your home’s value.

The most compelling feature of the HECM Reverse Mortgage is ability for the credit-line to grow. Growth on the credit-line is determined by the interest rate charged on the Reverse Mortgage.

Fannie Mae Home Keeper Reverse Mortgage:

Fannie Mae Home Keeper Reverse MortgageThe Home Keeper Reverse Mortgage is a government sponsored program that works like a HECM loan in many ways; however this mortgage does address several needs that a HECM does not. For instance, a Home Keeper works better for seniors who have higher property values or borrowers who wish to buy a home.

Seniors who choose the Home Keeper may receive the money from the mortgage in several different ways:

  • (1) -Fixed monthly payments for life (as long as you live in the home; or
  • (2) -A line of credit;
  • (3) -A combination of monthly payments and a credit line

The most significant difference between a HECM and a Home Keeper is that the credit line on a Home Keeper does not grow over time. In addition, you may use this program to purchase a new home- all in a single transaction. The out of pocket expenses are reduced, your potential mortgage payments are eliminated and you get to keep more of the sales proceeds from the old house.

The Cash Account Reverse Mortgage:

The Cash Account Reverse MortgageThe Cash Account Reverse Mortgage has been designed for senior homeowners with substantial home equity, higher valued homes and for borrowers who wish to have the maximum benefit. The Cash Account Reverse Mortgage has no limit on the home value or the amount of the loan. Money available to the borrower may be substantially greater than other types of Reverse Mortgages.

The cash account requires no income qualification. The loan amount is based on the home value and the borrower’s age and does not mature until the borrower sells or permanently moves. The credit-line option offers the borrower an open-ended revolving line of credit with the unused portion of the credit line growing over time.