Reverse Mortgages

Reverse Mortgages Are Good For:

Reverse mortgages are designed for homeowners aged 62 or older who have built up significant equity and want to access it without monthly mortgage payments. They’re ideal for retirees looking to supplement income, cover expenses, or age in place with greater financial flexibility.

Home Equity Conversion Mortgage

FDM is an experienced Home Equity Conversion Mortgage, commonly known as a Reverse Mortgage, lender meeting the financial needs of Senior Citizens. A reverse mortgage allows borrowers 62 and older to convert the equity in their current home into tax free cash to help them live a comfortable retirement. A reverse mortgage can eliminate your current mortgage payment, provide a lump sum tax free payment, create a stable monthly cash payment for as long as you live in your home or establish a Home Equity Line of Credit that you can access when you need additional cash. In fact, a reverse mortgage can combine all four options.
 
To obtain a HECM, you have to meet the following criteria:

•  You must be 62 years of age or older.
• The property must be your primary residence.
• You must have enough equity in your home.
• You can own your home free and clear or have an existing mortgage.
• HECM Counseling is required prior to loan application.
• A Financial Assessment is require to determine if the homeowner can support the payment of property taxes, homeowners insurance and home maintenance costs.  

 
There are four factors that determine how much you can borrow with a HECM:

• The age of the youngest borrower
• Current interest rates
• The amount of equity you have in your home.
• HECM’s are insured by the Federal Housing Administration and capped at the FHA Loan Limit.

HECM Advantages:

• You can use your reverse mortgage proceeds for anything you want, including consolidating your debts, supplementing your income, or making home improvements.
• You can eliminate your monthly mortgage payments. Just remember to continue to pay your property taxes and homeowners insurance.
• You remain the owner of the home. Your name stays on the title.
• Credit score is not a factor when considering eligibility for a HECM.
• Since the HECM is insured by the FHA, borrowers are better protected from declining home values.
• The HECM is what’s known as a nonrecourse loan, which means that a borrower will never owe more than their home is worth. If their home sells for less than what is owed on the loan, FHA insurance covers the difference – not the borrower or their heirs.
• No monthly mortgage payments are required. The loan is repaid when the home is sold or you no longer live there as your primary residence.
• Funds can be used for retirement income, medical expenses, home improvements, or other personal goals.

 
A HECM is a loan that allows seniors to use the equity in their home while paying off their existing mortgage. Insured by the government, a HECM can be used to supplement your retirement income, but the mortgage can be complex and isn’t always the right option for everyone.