Care for what you need,
maintain the lifestyle you love!
Home Equity
Conversion Mortgage
Home Equity
Conversion Mortgage
Care for what you need,
maintain the lifestyle you love!
Borrower Requirements
- Be 62 yesrs of age or older
- No minimum FICO score
- Own the property outright or paid-down a considerable amount
- Occupy the property as your principal residence
- Not be deliquent on any federal debt
- Participate in a consumer information session given by a HUD-approved HECM conselor
Eligible Property Types
- Single family residence
- 2-4 unit property
- HUD/FHA† approved condominiums
- Manufatured homes that meet FHA standards (Built on owned land, approved foundation with tags, no wheels or axle)
A Reverse Mortgage Success Story
HECM Guide for Homeowners
A HECM could be the right tool to help you at this stage of life
HECM Reverse Mortgage Quote
5 easy questions for a personalized quote
Busting the myths
about reverse mortgages
Busting the myths
about reverse mortgages
MYTH: Everyone says this is a "loan of last resort."
FACT:While a reverse mortgage can be a key resource during emergencies and times of need, borrowers are increasingly using their home equity as a means to unlock more possibilities in their later years, such as using the proceeds to travel the world, buy their dream home, or fund a living inheritance. It's your home equity, what you do with it is completely up to you.
MYTH: I saw on social media that I could get kicked out of my house.
FACT:With a reverse mortgage, you own your home, not the bank, and can't be kicked out so long as you uphold the terms of the loan*. The lender simply puts a lien on the property to ensure the loan will be repaid, just as with a traditional forward mortgage.
MYTH: My neighbor told me I won't be able to sell my home.
FACT:A reverse mortgage creates zero obstacles to selling your home. Like a traditional forward mortgage, it will need to be paid off at closing, but there are no prepayment penalties, and you could get less cash at the sale.
MYTH: I read online that there are a lot of fees.
FACT:With the exception of mandatory reverse mortgage counseling costs and FHA insurance (on HECM loans only), the fees for the reverse are generally the same as those for a traditional forward mortgage. It's also important to remember that with a reverse, most fees are added onto the loan balance, which means you pay little out-of-pocket up front.
MYTH: My kids say they'll get stuck with a huge bill after I'm gone.
FACT:A reverse mortgage is a "non-recourse**" loan, which means that if you default on the loan, or if the loan cannot be otherwise repaid, the lender can only enforce the debt through the sale of the property and cannot look to your other assets (or your estate's assets) to meet any outstanding balance. If the loan balance is higher than what the home is worth, your heirs will not be responsible for paying the difference when the home is sold to repay the balance.
MYTH: I heard that I can't leave my house to my kids.
FACT:Several factors, including your home value increasing over your lifetime, can make it possible to pay off a reverse mortgage and still leave your home/equity to your heirs. You can also choose to take less equity out of your home in the beginning, pay down the balance as you go, or simply use a reverse mortgage to establish a line of credit to be used only if you truly need it, which would help you to retain more equity in the home.
The bigger question is: do your heirs want the home? For many children, seeing their parents happy and thriving in retirement far outweighs any potential inheritance they may receive. A reverse mortgage can help with this, so it's worth it to have a conversation with your heirs about what is most important to them.
"A reverse mortgage loan is a non-recourse loan which means we're not obligated to repay mom's loan!"
-Mike K.
Home Equity Conversion Mortgage FAQs
What is a HECM mortgage?
A HECM mortgage is a loan that enables homeowners and homebuyers age, 62 years old or older to convert a portion of their home equity into cash or a line of credit. There is also an option that alows homeowners to finance a new home purchase. With a HECM mortgage, you can choose not to make monthly principal payments. You continue to live in and own your home.
*Unlike a traditional home equity loan or home equity line of credit (HELOC), you don’t have to repay a HECM mortgage until the home is sold or the last surviving borrower (or a non-borrowing spouse who meets certain requirements) no longer lives in the home, as long as you meet loan obligations. The homeowners must maintain the condition of the home and stay current with property taxes and hazard insurance.
For certain proprietary ®️ products only, excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina, Texas, and Utah, where the minimum age is 62
What are my loan obligations?
The HECM mortgage borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance, as well as homeowners association fees, if any. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid.
How much do I qualify for?
Speaking with The Kristoff Team is the best way to get concrete numbers that reflect your individual situation. The amount you may qualify for is highly dependent on several variables, including: your age, the state you live in, current interest rates, your home’s value, and the HECM product and disbursement option you choose.
How will I receive my cash?
For most products, you have the ability to access your home equity in the way that makes the most sense for your financial needs. Options include receiving a lump sum upfront, setting up monthly disbursements, establishing a line of credit – or a combination of all three.
What happens at the end of the loan?
Typically, a HECM mortgage ends when you no longer use the home as your primary residence. This could be due to several factors, including a permanent move, selling the home, or the last borrower passing away. At this time, the balance must be repaid.
It’s important to remember that HECM mortgages are non-recourse loans, which means that you, or your estate, can’t owe more than the value of your home when the loan becomes due and the home is sold.
What are the differences and benefits of reverse mortgages and home equity conversion mortgages?
Do you want to get access to your home equity, but aren’t certain which option is right for your needs? The Kristoff Team can help.
†Guaranteed Rate is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the Nevada Department of Veterans Services, the US Department of Agriculture, or any other government agency. No compensation can be received for advising or assisting another person with a matter relating to veteran' benefits except as authorized under Title 38 of the United States Code.
*As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and keeping your home in good condition.
**The non-recourse feature of a Home Equity conversion mortgage means that you or your heirs will never owe more than the home is worth when the loan is repaid.
This is not a commitment to lend. The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid. Otherwise, the loan must be repaid when the last borrower passes away or sells the home. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. This material has not been reviewed, approved or issued by HUD, FHA or any government agency. Guaranteed Rate, Inc. is not affiliated with or acting on behalf of or at the direction of HUD, FHA or any other government agency. To find a Reverse Mortgage counselor near you, search the HECM Counselor Roster at†https://entp.hud.gov/idapp/html/hecm_agency_look.cfm or call (800) 569-4287.