What Exactly Is A Reverse Mortgage?
A reverse mortgage (also called a HECM which stands for Home Equity Conversion Mortgage) is a program for senior citizens (age 62+) to use some of the equity in their homes. It is a loan that can give older Americans greater financial security yet allow them to remain in their homes. It is a special type of mortgage (FHA insured) that lets the senior convert a portion of the equity in the home into cash. These loans are not like the traditional home equity loans or second mortgages because this loan (reverse mortgage) does not have to be repaid until the last borrower no longer lives in the home or the borrower fails to comply with loan terms.
To qualify, besides being 62 or older, you must own your home (or at least 50% of it). You must have decent credit and have the money to maintain your home, pay the taxes and homeowner’s insurance—and live in the home as your primary residence!
*These materials are not from HUD or FHA and were not approved by HUD or a government agency.