AgentMortgage

Is lump sum HECM right loan for seniors?

How, when and why to take a reverse mortgage

Editor's note: This is the first of a multipart series. FHA-insured reverse mortgages, also called home equity conversion mortgages, or HECMs, allow seniors to withdraw cash from their home while retaining the right to live there indefinitely. They are a potentially powerful tool for helping seniors live better lives during their retirement years, and new HECM options enlarge the possibilities. However, the benefits can also be frittered away, with little lasting benefit to the senior, and all too many seniors are doing just that. About two-thirds of all HECM borrowers today withdraw the maximum amount of cash possible at closing, which leaves the senior with no borrowing power for the future. While some seniors have compelling reasons for withdrawing the maximum amount of cash at the outset, many are making a mistake. HECMs are complicated Underlying the mistakes that seniors make is the complexity of HECMs and the fact that few seniors understand them. The new options in...