Perhaps you’ve heard about a home equity conversion mortgage or HECM. This type of loan enables seniors to use the equity in their home as a type of financial security. Also known as a reverse mortgage, an HECM is beneficial in many ways. Seniors considering this avenue could benefit from the following information.
Personal Eligibility
To be eligible for a home equity conversion mortgage, individuals must be at least 62 years old. They have to own their homes with little to no balance left on their mortgage. The proceeds from the HECM should be able to cover the remaining portion with much to spare. Proof of financial resources will often be required, and individuals will need to reside in the home they own. Speaking with a lender will help you understand more about eligibility.
Home Eligibility
There are certain requirements to determine whether or not your home is eligible for this type of mortgage. For example, the home will need to be a single family home. If not, it can be up to a 4-unit home, but the owner will need to reside in one of the units. FHA requirements can help to determine eligibility as well for manufactured homes and condominiums approved by HUD standards.
Loan Amount
You won’t know how much you can receive for a home equity conversion mortgage until you sit down with a lender and go over all of the requirements. Each individual will be approved for a different amount depending on the age of the borrower, the interest rate at the time, and the sales price or current appraised value of the home.
Learning as much as you can about a home equity conversion mortgage is a good idea if you plan to use the equity built in your home. Contact your lender today to find out what you can do to qualify for this type of mortgage, and begin enjoying the fruits of your labors today. For more information about our services, contact Longbridge Financial today.
