A Key to a Comfortable Retirement
A Home Equity Conversion Mortgage can make retirement golden
Home equity is one of the most underutilized retirement tools available. Although housing wealth represents about half of an average household's net worth, it's ignored far too often when planning a homeowner's next stage of life. Whether you're looking toward your golden years or are already living them, a Home Equity Conversion Mortgage (HECM) can help you access your capital and make your retirement finances worry-free.
What's a HECM?
HECMs enable homeowners 62 years and older to access a portion of their home equity for use in retirement. With a HECM, you receive funds as a line of credit with a growth factor, lump sum, monthly payment, or a combination.
HECMs make the equity you've built up over years of mortgage payments work for you. Plus, you'll benefit from these favorable terms when qualifying and living with your loan:
- There's no need to prove income, employment, or creditworthiness
- Accrued principal and interest don't need to be repaid unless you leave your home
- You retain the title to your home
Who benefits from a HECM?
Maybe you're interested in using your equity as a resource now. Perhaps you want to remain in your home throughout retirement. Or you could be looking to pay off expenses or check off bucket list adventures. Whether you identify with one or all of those scenarios, a HECM is likely right for you.
To qualify for a HECM, you must:
- Be at least 62 years old
- Live in the home as your primary residence
- Meet credit and income guidelines
- Have a current mortgage balance that's low enough to be paid off with the HECM proceeds
What are the drawbacks of a HECM?
Before getting a HECM, consider these important points:
- Your eligibility for certain government programs may be impacted
- You may have to pay fees and mortgage insurance premiums
- You remain responsible for property taxes and homeowners insurance
- You'll have less home equity to pass on to your heirs
What are the advantages of a HECM?
While you've likely explored many options for financing your retirement years, few are as versatile as a HECM. You can use HECM funds for:
- Living expenses
- Home improvements
- Medical expenses
- Paying off high-interest debt
- Remaining in your home
- Delaying Social Security
Make your retirement finances golden
In the right circumstances, a HECM can empower retirees to live without financial worries and with the funds to do what they please. You've worked hard for your home - so why not let your home equity work for you? Contact your CrossCountry Mortgage loan officer to see if a HECM is right for your retirement plans.