HECM Options

Single Disbursement Lump Sum Option

To help preserve equity in the home, the borrower can take a lesser amount of funds than he or she may qualify for.

For example, if the borrower is eligible for a $100,000 loan, but only needs $30,000 to fix the roof, they can take the lesser amount. A one-time lump sum payment is made to the borrower. 

The one drawback is that if the borrower wanted more money at a later time, he or she would have to refinance and get a new reverse mortgage and pay closing costs all over again.

For Purchase

While the typical retiree uses a HECM to eliminate debts, pay for healthcare and/or cover daily living expenses, a growing segment of the senior population is using it to purchase a home that better suits their needs.

The advantage of using HECM for Purchase is that the new home is purchased outright, using funds from the sale of the old home, private savings, gift money and other sources of income, which are then combined with the reverse mortgage proceeds. This home buying process leaves you with no monthly mortgage payments.

While study after study reveals that an overwhelming percentage of seniors want to continue living in their current home for as long as possible, for some people that isn’t the best, or safest, option. HECM for Purchase offers a solution to downsize into a place that’s more easily navigable, possibly more energy efficient, with lower maintenance costs, or which is closer to friends and family.