Reverse Mortgage

What is a Reverse Mortgage

A HECM (Home Equity Conversion Mortgage) is a special type of mortgage that enables homeowners age 62 or older to tap into the equity in their home. Unlike traditional home loans, no repayment of the HECM loan is required until the borrower no longer occupies the home as their principal residence, the borrower dies, the dwelling is in default on taxes, insurance, or home maintenance. At that time, the lender will declare the mortgage due and payable. What is borrowed plus interest is due to the lender; any remaining equity stays with the estate.

How Long Have Reverse Mortgages Been Around?

Reverse mortgages are a financial resource that have enabled seniors to use their home equity to sustain long term retirement while maintaining residence in their home. The program began in 1988 as part of the Housing and Community Development Act.

John Kinnamon

Reverse Mortgage Specialist

Direct: 301-466-5001
Email: jkinnamon@whmortgage.com

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Main Uses

Although there are no limitations as to how a person may use the proceeds from a reverse mortgage, most borrowers fall into one of these three scenarios:

Refinance

Typically paying off an existing mortgage, eliminating that monthly payment and accessing additional equity for retirement needs.

Purchase Money

Using a reverse mortgage to purchase a home. Buying “up” or stretching precious retirement liquidity while securing housing without a mortgage payment.

Part of a Retirement Planning Solution

Using Reverse as part of an over all retirement strategy to improve one’s financial security.