What Is A Home Equity Conversion Mortgage?

For some extra cash, homeowners over the age of sixty-two might want to consider learning about what is a home equity conversion mortgage. This is a reverse mortgage where homeowners over the age of sixty-two can take money out of the equity in their homes in a number of different ways. This is an FHA type of mortgage and the owner of the home retains ownership of the home. A home equity conversion mortgage can be a great way for older homeowners to stay in their homes while adding to their income.

One way a homeowner can receive money with a home equity conversion mortgage is with a line of credit. This is when the owner of the house can make withdrawals from the equity in their home whenever they want to. With a line of credit, the homeowner can withdraw money in different amounts. With this, there is a maximum amount the homeowner can withdraw, but the homeowner can make the withdrawals whenever it suits their needs.

Another way a home owner can receive money with a home equity conversion mortgage is with a term agreement. This is where the borrow selects a length of time where they will receive monthly payments from the equity of their home as long as they live in the home, and it is their primary residence.

Tenure is another way a homeowner can receive money from the equity in their home. Homeowners who choose tenure will receive monthly payments from the equity in their homes as long as the home is their primary residents.

Modified tenure is another way homeowners can receive money with a home equity conversion mortgage. This is like tenure in that the borrower will receive monthly payments as long as they live in their home and it is their primary residence. However, with modified tenure the home owner can also withdraw money up to a certain amount whenever they chose.

A final way homeowners can receive money with a home equity conversion mortgage is with modified term. Modified term is a combination of line of credit and term. With modified term the borrower will select a length of time were they will receive monthly payments. The homeowner can also withdraw money up to a certain amount off the equity of the house whenever they want to.

Never being forced to sell the home and being able to keep the proceeds in excess of the loan amount if you do decide to sell your home are just two of the great features of a home equity conversion mortgage.

Reference:

www.fhamortgage.org/Home-Equity-Conversion-Mortgage-HECM.html