• Harvey Stern

Reverse Mortgages and HECMs

Updated: Nov 6

There are a lot of people who have questions regarding HECM loans or in other words reverse mortgages. Reverse mortgages offer the user a lot of advantages and in some cases can and is a real life saver for the homeowner.


Reverse mortgages provide homeowners with an additional source of income in their old age which is essential for the home owner. This is essential for senior citizens who are unable to sustain themselves on their retirement funds and for those who require additional funds to live.


The principals of HECM are simple, it mortgages the home that the senior citizen is living in, and this requires that the applicant be 62 years or older. For senior citizens a counseling session for HECM reverse mortgage of your home would cost $125, however no one can be turned away if they are unable to afford that.


Law Offices of Sussman & Associates does suggest that everyone should be aware of the benefits and disadvantages of HECM before they apply for the mortgage. There are certain costs that the home owner must bear in order to be eligible for a HECM loan. Some of these are third party costs, loan servicing fees, and more. These fees go towards services such as home appraisal, surveys of the property and other legal requirements that the lender has.


There are certain clauses in the HECM loan that applicants should be aware of, these include the fact that the lender needs to continue paying home insurance fees, maintenance and other service charges that are associated with the home. This is due to the fact that while the loan is against the property, the ownership on the title deed is in the name of the applicant only.


Technically the loan amount cannot exceed the value of the home, and the lender does have certain rights to foreclose the loan. It is the responsibility of the borrower of the loan and their heirs to provide the user of the loan to pay back the loan in full, or the lender has the authority to close the loan which would result in a requirement of immediate return of the loan amount.


If you choose to apply for a HECM loan be sure that you understand all the pros and cons surrounding your HECM loan. This is essential and it is advisable to consult with a professional such as Sussman & Associates for proper guidance.



For further information on real estate, construction and related matters contact our Harvey I. Stern at hsternla@gmail.com or call 800-233-8521



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