What the Heck is a Heck-um?
“Heck-um” is the way we mortgage industry nerds pronounce “HECM,” the acronym for Home Equity Conversion Mortgage.
A HECM is commonly known as a reverse mortgage. And if you think about it, a reverse mortgage converts your home equity to cash, so the new name makes sense.
Who can use a HECM? The loans are available for homeowners who are 62 or older, meet financial requirements and have sufficient equity in their home. They must live in the home as their principal residence, maintain it and pay taxes and insurance.
How does it work? Proceeds first pay off the current mortgage on the home (no more mortgage payment!). Additional funds can be accessed through a lump sum payment, a line of credit or monthly installments.
How can the funds be used?
- Offset daily expenses
- Cover emergency repairs
- Pay medical costs
- Provide in-home care
- Purchase or build a new home
How is the loan settled? Because of FHA insurance, neither the homeowner nor the estate will be required to pay more than the value of the home at sale, even if the amount due is higher than the home’s value. The home can stay in the family. Heirs will pay the amount owed or 95% of the home’s appraised value, whichever is less.
If you’re interested in exploring a HECM for yourself or a loved one, please call us at 404-943-9910 or click here to complete our quick contact form.