Blog


By: Dave Puzniak

The Home Equity Conversion Mortgage, commonly known as a Reverse Mortgage, is an excellent solution to the senior care challenge.  For clients who are age 62 and older, a Reverse Mortgage can be used to create a senior care funding strategy.  This smart retirement funding tool leverages the power of an important financial asset – home equity – to help older clients receive the care they need while continuing to live in their own home.


Let’s dispel some old myths about the Home Equity Conversion Mortgage:

Myth #1 – The lender owns the home.

Reality – Borrower retains title to the home, no one is added.  The borrower must live in the home and continue to pay real estate taxes and homeowner’s insurance.


Myth #2 – The home must be free and clear of existing liens.

Reality – HECM is designed to pay off existing liens.  There must be sufficient equity to pay off the existing liens.
 

Myth #3 – Loan proceeds are taxed.
Reality - HECM proceeds are not income, therefore not taxed.

 

Myth #4 – There are restrictions on how to use proceeds.
Reality – Any proceeds remaining after paying off liens can be used; however, the borrower desires with no restrictions.

 

Myth #5 – Only poor people need HECMs
Reality – HECMs provide an opportunity to diversify a portfolio and help ensure against overdrawing existing retirement assets.
The HECM is not for everyone.  An analysis of your situation is necessary to determine if your needs and wants make a HECM the right decision for you.  

 

Let the professionals at First Integrity Mortgage Services walk you through the process to see if it is right for you and your family. Contact David Puzniak, NMLS# 559106, at 314-878-7900 or 314-486-2652 or dpuzniak@firstintegrity.com for more information and a personal meeting with you.