Types of Loans
There are several types of Home Equity Conversion Mortgage (HECM) loans. It is important to select the one that best meets your needs.
HECM Standard
The HECM Standard is designed for homeowners who need to borrow the maximum amount of their home’s equity. It is available with an adjustable rate and allows homeowners to receive their proceeds in various ways including as a lump-sum or a set monthly payment.
HECM Saver
The HECM Saver is a lower cost alternative to the HECM Standard, which makes it more comparable to a Home Equity Line of Credit (HELOC). It is typically used for homeowners that do not want to access all the funds from their home’s equity and desire lower closing costs. The HECM Saver is available as a fixed-rate or adjustable rate loan.
HECM for Purchase Loan
The HECM for Purchase can help homeowners buy their next home without having to make monthly mortgage payments. This loan enables homeowners to use the equity from the sale of a previous residence to buy their next primary home in one transaction. Regardless of how long you live in the home or what happens to your home’s value, you only make one, initial investment (down payment) towards the purchase.
Disbursement Options
With a fixed rate HECM loan, you can receive the cash in a lump sum. With an adjustable rate HECM loan, you can select:
Tenure
Equal monthly payments as long as at least one borrower lives in and continues to occupy the property as a principal residence.
Term
Equal monthly payments for a fixed period of months selected by the borrower.
Line of Credit
Unscheduled payments or installments, at any time and in an amount of your choosing until the line of credit is exhausted.
Modified Tenure
Combination of line of credit plus scheduled monthly payments for as long as you remain in the home.
Modified Term
Combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
Lump Sum
A single payment.
