Some of the pros and cons of the HECM Standard Reverse Mortgage, which is insured by the Federal Housing Administration (FHA). The reverse mortgage was first introduced by the FHA back in 1989, but had not really begun to gain in popularity until around 2007. The main reason being that the stock market completely tanked and millions of retired Americans needed to supplement their income. Today, there are 2 reverse mortgage products available, which is the HECM Standard and the HECM Saver. The Home Equity Conversion Mortgage (HECM) Standard has many features and benefits that a lot of retired Americans might not know about.The HECM Standard product allows for the maximum cash-out ability, if you need it. For example, if you were 74 years old and currently have a home that is valued at $250,000, then you could take out a lump sum amount of $172,250 to use for whatever you needed it for or you could take a monthly guarantee of $1,041 for the rest of your life. And lastly, you could also just take out a line of credit to use the funds whenever you needed it. None of these options require anytime type of monthly payback, only when you are no longer permanently living in the home. There are many options available when looking into a reverse mortgage.
There is a catch with this certain product. The upfront insurance fee is equal to 2% of the value of the home, this fee can be rolled into the loan however, so you will not need to pay it out of pocket. Also, the HECM Standard product only comes has an adjustable rate loan. If you are looking for a fixed rate reverse mortgage, you may want to look into the HECM Saver, but once again there are catches to that product. Each has their strengths and weaknesses to them.
Believe it or not most reverse mortgages are adjustable rate loans because most people opt for the combination of either two or even all three of the options mentioned before.
http://www.reversemortgageloanfinancing.com/2013/06/26/pros-and-cons-of-the-hecm-standard-reverse-mortgage/
Pros and Cons of the HECM Standard Reverse Mortgage
![Pros and Cons of the HECM Standard Reverse Mortgage]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5