Ways to Use a HECM

The Home Equity Conversion Mortgage (HECM) is a versatile retirement funding tool that can be utilized in many ways. Here are just some of the ways to use a HECM:

  • Buy the retirement home which suites your goals with half down and make no monthly mortgage payments on it. (*)
  • Reduce your monthly expenses by paying off your forward mortgage sooner. (**)
  • Re-model your home to accommodate aging limitations.
  • Maintain a line of credit (that grows) for health emergencies and surprises.
  • Cover monthly expenses and hold on to other assets while their value continues to grow.
  • Cover monthly expenses and avoid selling assets at depressed values.
  • Pay for health insurance during early retirement years until Medicare eligible at 65.
  • Pay your Medicare Part B and Part D costs.
  • Combine life tenure payments with Social Security and income generated by assets to replace your salary and maintain your monthly routine of paying bills from cash flow.
  • Pay for your children’s or grandchildren’s college or professional education.
  • Maintain a “standby” cash reserve to get you through the ups and downs of investment markets and give you more flexibility.
  • Combine proceeds with sale of one home to buy a new home without a forward mortgage and monthly mortgage payments.
  • Pay for long-term care needs.
  • Fill the gap in a retirement plan caused by lower than expected returns on your assets.
  • Pay for short term in-home care or physical therapy following an accident or medical episode.
  • Pay for a retirement plan, estate plan or a will.
  • Convert a room or basement to a living facility for an aging parent, relative or caregiver.
  • Set up transportation arrangements for when you are no longer comfortable driving.
  • Create a set aside to pay real estate taxes and property insurance.
  • Delay collecting Social Security benefit until it maxes out at age 70 1/2.
  • Eliminate credit card debt and avoid building new credit debt.
  • Cover monthly expenses in between jobs or during career transition without utilizing other saved assets.
  • Cover expenses and avoid capital gains tax consequences of selling off other assets.
  • Purchase health-related technology that enables you to live in home alone.
  • Pay for an Uber or Lyft account so you have mobility and access to appointments and social activities.
  • Help your adult children through family emergencies.

Interested? Questions? Contact us to learn more.

Borrowers are still responsible for property taxes, homeowner’s insurance, and complying with loan terms.  ** Loan proceeds must first be used to pay off the existing mortgage.

Fair Housing Broker