fbpx

Today's Reverse Mortgage Loans Are an Appealing Opportunity

“HECMs” Are Highly Regulated for Consumer Protections

Did you know that reverse mortgage loans now have extremely strong consumer protections, including federal insurance? 

“HECM” stands for Home Equity Conversion Mortgage, and it’s the most popular form of reverse mortgage—for good reason. It’s so popular that many people use “HECM” interchangeably with the term “reverse mortgage.”


Since 2013, the Federal Housing Administration (FHA) and the United States Department of Housing and Urban Development (HUD) have continually added consumer protections to HECMs.

Here’s Why HECMs Are So Attractive.

You Always Own Your Home

Even though you receive a payout for the equity in your home from a reverse mortgage loan, you are still the homeowner. And even if you spent every penny of the loan proceeds, no one—not the lender or the government—can make you leave your home as long as you pay taxes and insurance, and maintain the home. But if you do decide you want to sell your home and move somewhere else, you absolutely can. 

You always own the home

Even if all the loan proceeds are spent.

A Non-Qualifying Spouse Is Still Protected

Only one homeowner must be 62 or older to qualify for a reverse mortgage loan. But what happens if a spouse of the borrower is younger than 62 when the loan is taken, and the qualifying spouse passes away? As long as the surviving spouse is on the title, they retain full ownership of the home, just as if they had been the one to take out the loan originally. 

Your Loan Can Never Exceed the Value of Your Home

If the homeowners sell the home or pass away, the value of the home is used to pay back the reverse mortgage loan balance. If the loan is less than the home is worth, the excess cash goes either to the homeowners or their heirs. 

But let’s say the housing market is down when the loan needs to be paid off, and the loan amount far exceeds the market value of the home. Do the homeowners or the heirs have to pay the difference? No, they do not! HECMs are insured by the federal government, and if the loan exceeds the proceeds of the home’s sale,  the FHA pays the balance.   

If the loan exceeds the proceeds of

The home’s sale, the Federal Housing Administration pays the balance

Not you or your heirs!

You Don’t Have to Make Monthly Payments

The obligation of a monthly mortgage payment is a serious responsibility, and it keeps many people from retiring when they really want to. With a reverse mortgage loan, you never have to make a monthly payment. If you want to make payments for cash flow or tax purposes, you may do so, but there is no obligation, and it does not impact your ownership of the home. The only costs you need to take care of are property taxes, homeowner’s insurance, and home maintenance. 

Is This Surprising to You?

We suspect that it is. Most people with a negative view of reverse mortgage loans—even people who are considered financial experts—base their opinions on what reverse mortgage loans used to be like before 2014. Either that, or they confuse bespoke reverse mortgage loans with the federally insured HECM loans that we’ve covered in this article. 

Do You Want to Make the Most of Your Retirement Dollars?

Contact us today and a reverse mortgage professional will answer your questions. 

[Contact Us Today]

Want to See How Much Money You Could Recieve?

Click on the button to open the form that will help us customize a quote for you.
[Get Started]

*The information contained herein is distributed for educational purposes only, and Fairway Independent Mortgage Corporation (Fairway) does not guarantee any services, information and/or advice provided by the individuals, nor does it imply a partnership or exclusive relationship between Fairway and the individuals.

August 27, 2021

Find Out More About Our Loans, Like How Much You May Qualify For.

Please Fill Out The Form Below And We Will Be In Touch!

I am a

By entering your contact information, you are providing express written consent for Fairway Independent Mortgage Corporation to contact you at the email and number you provided via telephone, mobile device, automated means like autodialing, text SMS/MMS and pre recorded messages, even if you are registered on a corporate, state, or federal Do Not Call list. You are also acknowledging and agreeing to our terms of service and privacy policy. Consent is not required to use our services.