Review:
Hecm (home Equity Conversion Mortgage)
overall review score: 4.2
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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