Senior Spectrum
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Sept 2008
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Reverse Mortgages
What Is A HECM 100?
What is a HECM in the first place? HECM stands for Home Equity Conversion Mortgage, a reverse mortgage product of FHA/HUD. The HECM 100 is a new FHA/HUD insured reverse mortgage that's based on the traditional HECM 150. It has an interest rate one-half percent lower than the current HECM rate, giving senior homeowners greater cash benefits up front along with lower interest costs over the life of the loan.
The HECM 100 is designed to give homeowners greater flexibility than a traditional HECM 150, possibly making it more favorable for their particular situation, enabling homeowners to get more money, and pay less over the course of their loan. An HECM 100 may also allow some homeowners who were previously ineligible because of a lack of equity in their homes a new chance at a reverse mortgage.
Homeowners could potentially save thousands, even tens of thousands of dollars in total costs of the loan with the HECM 100, as compared to the traditional HECM 150, making the HECM 100 worth looking into. The lower interest rate offered by the HECM 100 makes it possible for homeowners to get more money out of their reverse mortgage.
The amount a homeowner pays back in the future will be lower and together, these advantages represent a significant improvement over competitive loans. This means the HECM 100 makes great sense as a refinance option.
Federally insured HECM reverse mortgages account for more than 90 percent of the reverse mortgages currently in effect in the United States. The amount of funds that a senior homeowner is eligible to receive under this program is based on a formula that takes into consideration four basic factors:
For more information on the HECM 100, contact a qualified reverse mortgage consultant. (Kathy Stone is a certified senior advisor and a reverse mortgage consultant with Allied Home Mortgage and a member of the National Reverse Mortgage Lenders Association. For more information or to attend an upcoming reverse mortgage seminar, call 775-324- 7122.
(Kathy Stone is a certified senior advisor and a reverse mortgage consultant with Allied Home Mortgage, and a member of the National Reverse Mortgage Lenders Association. For more information or to attend an upcoming reverse mortgage seminar, call 775-324-7122 or visit www.alliedmtgcapital.com.)