It is surprising how not many people like addressing critical issues that could profoundly impact their future lives. One of these is retirement, for which most people hardly prepare. But, the main worry is not usually because of age advancement, but financial security in the latter years.
But if you do not want to become a financial burden to your children and grandchildren in your old age, consider getting a home equity conversion mortgage or HECM. Here are reasons to get an HECM from reliable lenders.
You do not need a certain income or credit score
Unlike other types of mortgages, there are limited requirements on your credit score and income when taking a HECM. You, however, need to show that you are in a position to pay home insurance and taxes after getting the mortgage.
Minimal risk of default
Under no circumstance can your lender take away your home due to the failure of making a payment. You only make payments on the loan after leaving that house. You, however, will be paying the home’s insurance throughout your stay.
No limitations on your mortgage
Nobody dictates how you should use the funds you get from a HECM. You can choose to go for holidays, pay for education, or just save. You can use the cash the way you see fit.
The Department of Housing and Urban Affairs manages the HECM and classifies it under federal insurance. Thus, should you lender default, you can be sure you will still receive your payments as usual.
Flexible payment options
There are different types of loans to choose from, and you can get your money in the form of monthly payments, as a lump sum or as a line of credit. The decision depends on what you and your lender find convenient for your case.
Retirement does not have to be scary anymore when you have an option of taking a HECM. But always consult experienced lenders to determine the amount of HECM you will need to increase your spending power in retirement.