HECM for Financial Planning

Financial Planning and the Home Equity Conversion Mortgage (HECM)

The Home Equity Conversion Mortgage (a HECM is a reverse mortgage) has become part of the financial planning world. So shouldn’t you learn how it works? Both you and your clients need to understand how the HECM may enhance and protect their retirement portfolio. And as a fiduciary, shouldn’t you include the home as a potential asset when structuring the overall financial strategy. No longer a loan of last resort, the new and improved HECM can help those who may not necessarily need cash but wish to secure the longevity of their savings.

Let us show you how you could help your clients with some of these popular strategies

  • Manage Sequence of Returns Risk
  • Establish a Line of Credit
  • Supplement Income with HECM Tenure Advance
  • Manage Annual Adjusted Gross Income
  • Eliminate Monthly Mortgage Payment*
  • Use HECM for Purchase (H4P for short) to Buy a New Home

* Must maintain home as primary residence and keep property taxes, HOA dues, and insurance current.

What is Your Responsibility?

You owe it to yourself and your clients to learn more about the new and improved Home Equity Conversion Mortgage (HECM). In many cases, the home’s equity is your client’s largest asset and should not be ignored as a source of funds when creating a retirement plan.

To learn more, please contact Dan Williams here.

What are the basics of HECM?

  • At least one borrower must be 62 years or older*
  • The home must be the borrower’s primary residence
  • The borrower needs to have approximately 50% equity in the home
  • Title of the home remains with the borrower**
  • Borrowers have no personal liability to repay the loan. The loan is paid back only by the sale or refinancing of the home.

* In Texas all borrowers must be 62 or older

** Must comply with terms of mortgage

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