HECM reverse mortgages are often talked about when it comes to mortgage and credit options for the elderly. However, it gets a lot more serious if one is planning it for themselves or their elder relatives (above the age of 62). It becomes all the more important to know about the mortgage type in detail. Some of the basic yet essential facts about HECM reverse mortgages are:
It is designed to enable elderly citizens to be financially independent
HECM reverse mortgages are designed to assist the elderly people to live off their life in a comfortable and financially sound state. This means they get to receive a good sum of money (depending on various factors such as age, house value, etc.) and for which they have to pay no mortgage payments as long as they’re living in the house.
The ownership lies with the original owners
Many people have the misconception about the ownership of the house under HECM reverse mortgages that it is owned by the bank. It most certainly is not. The ownership lies with the original owners, but the condition which applies to it has to be met. The condition involves that the owner must use the house as their primary residence and they cannot lease it to another resident. The bank, on the other hand, has a lien on the house under a reverse mortgage and will be the first one to claim for it in a case of sale.
It is important to know the details about the nature of HECM reverse mortgages prior to opting for it for yourself or any of the elderly relatives so as to know what you’re getting yourself into. Consult with professional HECM reverse mortgages experts at Longbridge Financial for a detailed consultation and assistance with your credit option.
