Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program, which enables you to withdraw some of the equity in your home
Here is a link for FAQ about reverse mortgages.
The basics... If you're 62 and older and enough equity in your home, you can get a cash out loan secured against your home. This loan must be the only mortgage on the property. Therefore, if there is an existing mortgage, it must be paid off with some of the proceeds from the reverse mortgage.
There's no credit or debt-to-income guidelines. You do not have to make payments on the mortgage and repayment is deferred until you are no longer living in the home.
When the borrower is no longer living in the home, the loan must be paid in full, including interest and financed closing costs.
The good news is with a reverse mortgage you will NEVER OWE MORE THAN YOUR HOME'S VALUE at the time the loan is repaid.
Borrowers do continue to own their homes and are required to pay your property taxes, insurance and maintain the home with needed repairs. Failure to carry out these responsibilities may be grounds for the loan to become due and payable in full.
As the home appreciates and the borrower grows older they may qualify for more money, and the reverse mortgage may be refinanced to borrow more against the increased equity.
Elva A. Wormley
Office: (408) 615-8500
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128