The HECM is available as either an adjustable- or fixed-rate loan. With the adjustable rate, the rate is adjusted monthly based on the LIBOR (London Inter Bank Offered Rate). The fixed-rate HECM maintains the same interest rate over the life of the 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.
With a fixed rate HECM loan, you can receive the cash in a lump sum. With an adjustable rate HECM loan, you can select:
Equal monthly payments as long as at least one borrower lives in and continues to occupy the property as a principal residence.
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.
Combination of line of credit plus scheduled monthly payments for as long as you remain in the home.
Combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
A single payment.
The funds available to you may be restricted for the first 12 months after loan closing, due to HECM requirements.
Borrowers may access the greater of 60 percent of the principal limit amount or all mandatory obligations, as defined by the HECM requirements, plus an additional 10% during the first 12 months after loan closing. The combined total of mandatory obligations plus 10% cannot exceed the principal limit amount established at loan closing. Consult a Liberty advisor for further details.