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Is HECM The Answer?

Issue 51.12

There is so much information regarding the HECM or Reverse Mortgage being presented in today’s media. Robert Wagner, Henry Winkler and other celebrities can be seen on the television screen promoting this somewhat mysterious loan. Newspaper ads and radio spots all targeting the senior home owner.

But, is it a real viable option? Could it be a good solution to your financial problems? The answer is likely yes. There are multiple ways to use the HECM to provide financial peace of mind to the ever growing senior population in a scary economic era. Making available a large portion of your home’s equity and utilizing it as your needs require, regardless of what they might be, may be the solution. Travel, pay off debt, offer early inheritance to kids and Grandkids while you are still around to enjoy, afford medical procedures just to name a few options and with the introduction of the Purchase HECM, a whole new dimension was added to the market. Now a senior can buy a home using approximately 40% of the cost as the down payment and never pay a mortgage payment as long as they occupy the property as their primary residence.

This sounds very intriguing but how safe is it? Or the more common question “It sounds too good to be true. What’s the catch?” Well, to answer both questions. It is safe and it is not too good to be true and here is why: HUD or the Housing and Urban Development is heavily involved in all of HECM’s evolution and regulation. To acquire a HECM you must first seek a short counseling session by a certified HUD service. This insures you receive real and unbiased information. This is NOT provided by a lender but a disinterested party who has been trained to give you the straight answers. Next, you will pay an FHA mortgage insurance premium as a fee to your loan (included in closing costs) which allows the Government to have the stability to maintain hundreds of these loans being provided everyday Nationwide.

Every person has an idea of what financial peace of mind means to them. For a simple and free evaluation, call me to set an appointment and we will discuss all of the above items in a non-pressure atmosphere. Education is the first step. Scott Gibson can be contacted at 435-767-1092.

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