Your Key Reverse Mortgage Information – HECM.

If you are an American senior, age 62 or over and a home owner, this reverse mortgage information is for you. To-day I write about HECM.

How does a HECM reverse mortgage loan work?

A HECM reverse mortgage information rules, that the borrower can get several payments during the life of the loan. The target of the HECM reverse mortgage loan is, that a senior borrower can keep his standard of living on a good level, despite of the fact, that his income has decreased.

Actually the money comes from the equity of the borrower`s home, but he will not pay anything back until the closing moment of the loan. This happens, when a borrower moves permanently away or dies. This is one of the corner stones in the HECM reverse mortgage information.

1. HECM To Purchase A New Home.

Principally the HECM allows a borrower to buy a new home, but this term differs from state to state. In most cases the reverse mortgage information says, that the borrower has a freedom to use the loan for whatever purpose he wants.

2. The Reverse Mortgage Information: Fixed Rate HECM.

Usually the HECM mortgage loan has a variable interest rate, which fluctuates from month to month. But there is also a new product, a fixed interest rate HECM. This gives a borrower a peace of the mind, because he knows how much he will pay when the loan will be closed.

3. The Reverse Mortgage Information: Flexible Payments.

When a borrower uses the ARM HECM option, he has a freedom to choose the payment way as he will: as a lump sum, as monthly payments, as a credit line or as a combination of all these.

4. The Reverse Mortgage Information: New Margin Index.

Companies do not anymore use the CMT index to measure margins for the reverse mortgage loans. The new index is called Libor, a London based index. This Libor offers better terms for the borrower with the idea to maximize the cash return to the borrower.

5. The Reverse Mortgage Information: New Counseling Requirements.

Due to more and more senior borrowers being unable to understand the terms of the reverse mortgage loans, the U.S. Department of Housing and Urban Development and the Federal Housing Administration have put together a new counseling instructions, which try to guarantee, that a borrower will understand all key points before signing.

6. The Reverse Mortgage Information: New Loan Limits.

The Obama administration increased for the fiscal year of 2009 the reverse mortgage loan limit, which a borrower can take on his house from $417,000 to $625,500.

7. The Reverse Mortgage Information: Updated Refinancing.

HUD and FHA have updated their rules of refinancing concerning the senior borrowers, who have made it to the maturity date on their present reverse mortgage. The new terms include so called Anti-Churning Disclosure form, which prohibits lenders to benefit from the reverse mortgage refinance on behalf of the borrower.

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