A Home Equity Conversion Mortgage (HECM) is also known as a reverse mortgage. Reverse mortgages are like home equity loans with one major difference. Like a home equity loan, you borrow against the value of your home. And like a home equity loan, you can get the cash from a reverse mortgage in a lump sum or in dribs and drabs as you need it. With a reverse mortgage, you pay back nothing on the loan until you move out of your home or sell it. The proceeds are used to pay off the amount you’ve borrowed, and the amount you owe is limited to the value of your home. Learn more here about reverse mortgages or a HECM.
When a family member wants to bequest property to another family member you need to do estate planning. If the property owner has liens against her property, that is she owes money to creditors who want to be paid when the property is sold, then the new property owner may be liable for those debts. Rather than transferring the property through probate, it's better to sell the property ahead of time and take care of the liens now.
A reverse mortgage can be a good option for an elderly parent who has equity in her home but not much cash. If the parent is over 62 and owns her home, she would be eligible. The money would be doled out in a lump sum or monthly payments that would be paid back when the house is sold. A reverse mortgage is a good way for a parent to use her home's equity to enjoy her retirement.
The idea behind a reverse mortgage is to allow seniors age 62 and older to tap into the equity they have built up in their homes to augment their income or make necessary repairs to their home. You can either get the cash in a lump sum, or as a home equity line of credit, where you can write a check as need be, or as a stream of income.
Many seniors are living only on social security and each month are worried that they'll run out of cash before their next social security check arrives. Your retirement years shouldn't be the time that you wonder whether you can make it financially. Tapping into the equity of your home can help support you financially during your retirement years.
Reverse mortgages or HECM's have become a booming business. They allow seniors to get cash out of their homes. To get the most out of a HECM, you need to capitalize on interest rates and home values. The money from an HECM is available in lump sum, monthly payments or a home equity loan or line of credit.
If your neighbor has a reverse mortgage, can she and her mortgage lender be held responsible for criminal activity at the home? With a reverse mortgage or hecm, the mortgage lender pays the homeowner over time and the the lender is repaid when the home is sold. But even though the mortgage lender holds a lien on the home, it couldn't be held responsible for the criminal activity. The only one liable is the homeowner. But before a neighbor files a lawsuit, he should contact his local police department.
When you're in retirement you want a consistent, stable flow of income such as from a certificate of deposit. What should you do if your CD's rate of return can't match the income you need? You could move the money into a Roth IRA. But changing over to a Roth IRA may cause funds to be taxed at a higher amount than what would otherwise be paid on a year to year basis. Another alternative is a reverse mortgage.
Reverse mortgages are often a good option for seniors who live on a fixed income. There are two kinds of reverse mortgages - one from HUD and the other from Fannie Mae. You should only use a reverse mortgage lender who is legitimate and watch out for scams. There are several websites and books that offer a wealth of information on how to pick the right reverse mortgage lender.
A reverse mortgage can be a good option for seniors on a fixed income. A reverse mortgage allows a home owner over age 62 to use his home's value to get a loan in a lump sum or monthly payments. The home owner doesn't pay anything back on the reverse mortgage until he moves out or sells it. Several book and websites offer information on reverse mortgages and mortgage lenders.