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While a Home Equity Line of Credit, or HELOC, can be a worthwhile path to getting the cash you need, it’s far from the only way to empower yourself financially. HELOCs can carry variable interest rates, and high monthly payments might spur homeowners into looking elsewhere for financial peace of mind. If you are a homeowner at least 62 years of age, consider a Home Equity Conversion Mortgage, or HECM, and help eliminate any more stresses about cash flow as you approach your retirement years. 


How Does a HECM Work? 

When you take out a HECM, also called a reverse mortgage, on your home, the lender may pay you cash in a lump sum, or they may issue you regular payments. Under some loan agreements, you may also opt to “draw” on your HECM as your needs arise, affording you the same flexibility as a HELOC.  

But unlike a home equity line of credit or a conventional mortgage, you will not be expected to make regular, scheduled payments after taking out a HECM. Rather, you will be expected to pay off the balance of the loan when you vacate your current home or otherwise fail to occupy your home longer than a year.  


How Much Cash Could a Home Equity Conversion Mortgage Net Be?  

So long as you qualify, and have made sufficient progress towards paying down the primary mortgage on your home, a HECM can prove to be quite a windfall for homeowners going into retirement. Whether you are ready to start drawing a pension or just starting to sketch out your plans for retirement, it doesn’t hurt to peek at how much value your home has gained in the time you’ve owned it.  

That’s where The Federal Savings Bank comes in to help. Speaking with a loan officer can help you determine the path to finance or supplement your income in retirement. The well-versed team at TFSB can even help you determine if a refinance or another kind of reverse mortgage is the most prudent way to get you the funds you need. Don’t delay- reach out today. 


Eligibility requirements apply. HECM Counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance or maintenance, or otherwise does not comply with the loan terms. 

This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to you individual situation.