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Hecm (home Equity Conversion Mortgage)

overall review score: 4.2
score is between 0 and 5
A Home Equity Conversion Mortgage (HECM) is a type of reverse mortgage that allows homeowners aged 62 or older to access some of the equity in their home in the form of either a lump sum, monthly payment, line of credit, or a combination of these options.

Key Features

  • Provides supplemental income for retirees
  • Does not require monthly mortgage payments
  • Borrower retains ownership of the home
  • Loan is typically repaid when the borrower sells the home or passes away

Pros

  • Helps retirees access funds without having to sell their home
  • Flexibility in how funds are received
  • No monthly mortgage payments required

Cons

  • Accrued interest can reduce equity in the home over time
  • Closing costs and insurance premiums can be expensive
  • May impact eligibility for certain government benefits

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Last updated: Sat, Nov 23, 2024, 06:46:27 AM UTC