If you have been a part of the real estate industry for a while now, you might have come across the term ‘home equity’ a number of times. Home equity is basically the difference between your mortgage value and the current value of your real estate property. However, for homeowners who are above the retiring age, essentially 62 and up, the government offers some incentives to this. It allows such people to access loan based on the true equity of their home. This government guaranteed reverse mortgage product is known as Home Equity Conversion Mortgage. Any borrower can apply for one through banks that are approved by the Federal Housing Administration. It is necessary that each applicant receives a counseling session from verified counselors, learning the terms and conditions of these mortgages better, along with any other option they might have.
Since Home Equity Conversion Mortgage is a rather new development in the real estate world, it can be quite hard for some people to understand its true meaning. Here are some definitions of the same that can help you understand it better:
I. A reverse mortgage that is usually insured by the government for any homeowner of age 62 and above is known as a Home Equity Conversion Mortgage. These kinds of reverse mortgages can only be borrowed from banks that are authorized by the Federal Housing Administration.
II. A Home Equity Conversion Mortgage is basically a kind of reverse mortgage that gets insured by the Federal Housing Administration. This policy helps seniors of and above the age of 62 to transform their home equity into spendable cash.
Home Equity Conversion Mortgage can come in handy in a lot of situations, especially since this helps the retired people. Apart from their pension, retired people often have no other form of income. However, financial emergencies can come up at any given time. This is when using the money received from Home Equity Conversion Mortgage can really help them.
They will get cash reimbursement for the current equity in their homes making it a lump sum amount. The borrower also has every right to use this cash for any kind of financial need they have, whether it is their daughter’s wedding or a medical emergency. In addition to that, they will never get cheated as this loan is sanctioned by the government.
