What the HECK is a HECM? Reverse Mortgage Explained
By Bill Donofrio
Safe and secure; words that describe the way we would all like to live and the way we want our loved ones to live as well. Those same words describe today’s government-insured and regulated Home Equity Conversion Mortgage, or HECM (pronounced Heck-um) program.
HECM loans are designed to provide seniors (62 and up) with a layer of financial security by allowing them to access the equity in their home. Proceeds from a HECM are non-taxable and can be taken in a lump sum, monthly payments, or in a line of credit. The funds can be used for many purposes including:
• Paying off an existing mortgage
• Defer applying for Social Security to maximize benefits
• Make home repairs
• Pay for home health care or other medical expenses
• Provide extra income when needed
• Handle unforeseen expenses comfortably
Payments are completely optional on a HECM. There are no payments due with a HECM loan, as long as at least one borrower continues to live in the home as their primary residence, stays current on real estate taxes and insurance, and maintains the home to minimum FHA standards.
Additionally, HECM loans are non-recourse loans, meaning, you can never be “upside-down” on a HECM loan. This means you can never owe more than your home is worth. HECM loans provide peace of mind to those who need it most.
I would welcome the opportunity to speak with you if you would like to find out if a HECM is right for you, a friend, or family member.
Bill Donofrio is a reverse mortgage professional ad a lifelong Queens resident, growing up in Bayside and then moving all the way to Whitestone, where he currently live with his wife Maria (and bulldog Fiona). He represents PS Financial Services, a leader in the HECM industry. His approach is to educate potential borrowers to see if a HECM is the right way to go. PS Financial Services is located at 61-43 186th Street in Fresh Meadows.
