Create More Financial Flexibility in Retirement
A common concern in retirement is whether your savings will last over time. With factors like longevity, market conditions, and unexpected expenses, maintaining steady cash flow can be challenging.
But there’s good news: A Home Equity Conversion Mortgage (HECM) loan is insured by the FHA and explicitly designed for homeowners 62 and over.
With a HECM, you can:
- Receive proceeds as a lump sum, monthly payments, or a line of credit
- Use HECM funds to refinance (pay off) a traditional mortgage if you still have one
- Choose to make payments toward the balance (or defer repayment) while living in the home and meeting loan obligations like paying for taxes and insurance
Additional funds may be used for a variety of needs, such as:
- Creating a financial reserve
- Covering healthcare or long-term care expenses
- Paying down higher-interest debt like credit cards, car loans, and more
- Funding home updates or modifications
- Supporting day-to-day living or lifestyle goals
The Flexibility of a HECM Line of Credit
A HECM line of credit provides access to funds when you need them, with the unused portion potentially increasing over time. This structure can help support both current cash flow needs and future financial planning.
How Is the HECM Line of Credit Different From a HELOC?
While traditional home equity lines of credit (HELOCs) may offer lower upfront costs, a HECM line of credit is designed specifically for older homeowners and includes features that may better align with retirement planning goals. Here’s a comparison chart of the two products:
| Home Equity Line of Credit (HELOC) | HECM Line of Credit | |
|---|---|---|
| As an adult, is there a minimum age I need to be? | No | 62+ |
| Do the unused funds in the line of credit accrue interest? | No | No |
| Are monthly principal and/or interest mortgage payments required?1 | Yes | No1 |
| Does the unused portion of the line of credit grow over time to produce greater borrowing capacity? | No | Yes (grows at the same rate as the loan balance) |
| Is it a non-recourse loan? (Never owe more than the home is worth when it’s sold)2 | No | Yes2 |
| Are the draw periods limited? | Yes. Typically, there’s a 5- or 10-year draw period (time frame depends on product) | No |
| Are there any prepayment penalties? | Depends on product | No |
| Which product is generally easier for 62+ homeowners to qualify for? | More difficult | Easier |
| Can the line of credit be frozen, reduced or canceled based on market conditions? | Yes | No |
2There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrower is still responsible for paying property taxes and insurance and maintaining the home. Credit subject to age, property and some limited debt qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.
Customer Stories: Creating More Freedom in Retirement
Why Fairway Independent Mortgage Corporation?
Fairway Independent Mortgage Corporation is a national mortgage lender with top-notch customer service.
We’re committed to providing an amazing experience – from loan application to closing, and beyond.
- We’re a national, full-service lender with high customer satisfaction scores
- We’re ranked as one of the top 10 mortgage companies in America by Mortgage Executive Magazine
- As an FHA-approved lender, we can sell HECM reverse mortgages
- We’re dedicated to educating consumers, as well as their family members and other trusted advisors, on the pros and cons of reverse mortgages
Schedule an Appointment With Us Today!
Call us or complete the form below to schedule a free consultation. Together, let’s find out if leveraging home equity is the right move for you and your retirement.