Think twice before choosing HELOC over HECM

How, when and why to take a reverse mortgage

The major theme of the two previous articles in this series is that the Home Equity Conversion Mortgage (HECM) has great potential value to senior homeowners planning their retirement. The value is realizable, however, only with the adjustable-rate HECM that provides multiple options for receiving payments.

Many borrowers are electing the fixed-rate HECM, which requires that they draw the full amount of their borrowing power in cash, leaving nothing for the future. In this and the next article, I will leave the realm of generalities and discuss the pros and cons of specific HECM uses.