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Mike Bowers
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It is an age based (actuarial driven) mortgage - calculated using the current market value of the home and the age of the youngest borrower - designed to match the normal life expectancy of the borrowers.
I prefer to call it: The Flexible Retirement Mortgage. The HECM mortgage gives every borrower Options and Choices. The HECM mortgage "monetizes the locked-up equity in home- into liquid spendable cash. It can be taken in a lump sum, a payment each month, or allowed to stay in guaranteed, non cancelable line of credit.
Just like any other mortgage they simply pay of the mortgage owed to the Bank. There are no prepayment penalties. Any remaining equity belongs to the borrowers or to their estate.
Based upon the age of the youngest borrower approximately 50%. Older borrowers may expect more and younger borrowers will qualify for less.
Age 62 and up. No Federal - State or local tax or property liens. Borrowers must have sufficient monthly retirement cash flow to meet minimum income and expense underwriting requirements.
Normally at least 50%
Just like any other mortgage you simply pay of the mortgage owed to the Bank. There are no prepayment penalties. Any remaining equity belongs to the borrowers or to their estate.
When the last borrower dies or permanently vacates the home, the mortgage balance becomes due.
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner's insurance, the costs of home maintenance, and any HOA fees.
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