Think twice before choosing HELOC over HECM

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Editor's note: This is the third in a multipart series. Read Part 1 and Part 2. 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. Pay off a forward mortgage Part of the received financial wisdom of my generation was that your mortgage should be paid off by the time you retired. That way, no part of reduced retirement income had to be used to pay the mortgage. But too many are retiring today while still burdened with a mortgage, and some are...