The Elder and Disability Law Firm, APC
What is HECM?
Retirement planning is something that is very important and it is neglected by far too many people. In the end, there is no guarantee that you will be able to retire. To do so you are going to have to be able to pay your way without working for perhaps a couple of decades or more, and for a lot of people this is going to take some very careful and intelligent long-range planning.
San Bernardino retirement planning lawyers are always going to tell you that it is important to understand the options that are available to you when you are considering what your retirement years are going to look like. To this end it is useful to know what a HECM is even if you never have any need for one.
HECM in a retirement planning context stands for a home equity conversion mortgage. These are reverse mortgages that are federally guaranteed. In fact, you have to go through a HUD approved informational session before you can close on a home equity conversion mortgage.
In brief, with these reverse mortgage loans you receive payments from the lender and in return the lender receives equity in your property. The reverse mortgage becomes due when you either pass away or move from the property voluntarily. You or your heirs could then sell the property, pay off the reverse mortgage, and do whatever you want to with the remainder.
Let it be said that we are not expressly advocating this course of action. There are costs associated with taking out these loans and this is something to take into account.
Our intention is to explain what these loans are all about so that you are aware of all of your options. If you need liquidity late in life a HECM may provide a solution and it is something to be aware of as you look forward toward your elder years.
An HECM, also known as a Home Equity Conversion Mortgage, is a reverse mortgage loan option backed by the federal government offering senior citizens an opportunity to tap into the equity in their homes to increase their income or assets or to pay off necessary expenses.