HECM's EXPLAINED
Many misconceptions exist regarding this financial instrument. Dave Carter, one of just 150 nationally certified agents for HECM's provided some lesser known features to Reverse Mortgages, or HECM's home equity conversion mortgages . As an FHA insured loan, lenders are protected from losses if the borrower's debt ever exceed the home's selling price. Up front fees currently 2% of the full walk through appraisal value are added to the loan cost, and a .05% monthly premium applies. The mortgage is based on up to 50% of the appraised value. The current interest rate is 4.3%, and variable rates have a present cap near 9%.
The loans may be used to finance another property. Many borrowers choose to pay interest only. The balance of the loan is due at either the death of the borrower, when the home no longer is the borrowers principal residence, or upon the borrowers 150th birthday.
Dave works at Reverse Mortgage Funding and may be contacted at dcarter@reversefunding.com
