Home Equity Conversion Mortgage Have Huge Impact during Retirement
With all the money spent on commercials for reverse mortgages, you’d think seniors are up-to-speed on this unique government insured program that can generate tax-free income from their home equity. But there are additional programs under the Home Equity Conversion Mortgage (HECM) that could be the difference in barely getting by in retirement and truly enjoying your golden years.
HECM loans are not a silver bullet for every retiree and they haven’t been good for everyone who has used them. But for many, these strategies are just short of a godsend.
There are requirements for HECM loans and suitability determination for which strategy fits your retirement course of action. Whatever HECM strategy you select, keep in mind you still have property taxes and homeowners insurance to pay. You still have a mortgage, but you don’t have a mortgage payment. Also please note, you still have closing costs with any of these transactions.
There are many HECM strategies Tax-Free Income, Mortgage Payment Elimination and an Appreciating Equity Line of Credit, just to name a few. Watch the interview with popular platform speaker, author and leading authority on Home Equity Conversion Mortgages Don Graves, as he introduces the various options options.
Reverse mortgage is an alternative use of your home equity for tax-free income. In a traditional mortgage, you make payments to the lending institution. In a reverse mortgage, the institution makes loan payments to you. Loans on an existing mortgage are not classified as income while you maintain the mortgage.
A home purchase mortgage is another alternative use of your home equity where you can buy a home for around half its sale value not to exceed the maximum claim amount. The main stipulation here is you need around 50 percent cash down to secure the entire transaction. You have a government-insured mortgage, but no mortgage payment. An equity line of credit is an additional alternative use of your home’s equity, where the line of credit grows separate from your home’s market value.
Each HECM loan strategy needs to be diligently explored with a financial advisor who knows the HECM loan provisions or is aligned with HECM loan specialist.
Nationally syndicated financial columnist and talk show host Steve Savant interviews popular platform speaker, author and nationally recognized HECM authority Don Graves. Steve and Don talk about the power of HECM strategies in retirement. Right on the Money is a financial talk show for consumers distributed to over 280 media outlets, social media networks and financial industrial web portals. (www.rightonthemoneyshow.com)