First things first, 98% of all reverse mortgages are the Federally Insured Home Equity Conversion Mortgage, also known as a HECM, or "Heck-um". The "new" HECM is the Federal Housing Administration's upgraded or enhanced reverse mortgage credit line program. The "Old" reverse mortgage is obsolete - making it impossible to really compare the two.

A HECM is a Credit Line that allows you to access your home's equity for any purpose. This extra cash flow can help you meet your retirement needs, whether by paying off an existing mortgage, paying off credit card debt, making home improvements or repairs, advancing inheritance to your heirs or for any purpose you wish. There are NO required monthly payments on any balance you have from your HECM Credit Line. Monthly payments on any balance you have are completely optional, so you can pay as little or as much as you want every month.

Scenario #1

Bob and Joyce thought they had a good retirement planned out, but their financial planner showed them that at their current spending, they would run out of money by the age of only 82.

Due to this alarming concern they spoke with a Senior Lending Advisor who showed them that using their homes equity, through a HECM Credit Line, could supplement their income which in turn would prevent premature asset depletion of their retirement portfolio. After reviewing the proven studies in the Journal of Financial Planning, their financial planner concurred and helped them set up a strategy.

All they needed to do was take small draws from a HECM Credit Line to reduce their portfolio withdrawals, which ultimately ensured that their money would extend well past their 99th birthdays!

Scenario #2

Harold & Lena' s home was valued at $475,000 and they had a $149,000 mortgage outstanding. They qualified for a HECM credit line of $264,525 which paid off their mortgage balance and left them with the difference of $115,525 remaining in their HECM growing credit line. They were relieved that they no longer had to make their $873/month mortgage payment for the rest of their lives. They also had the security of a credit line that's guaranteed to grow overtime.

Scenario #3

Claire owned her home free and clear. Even with no mortgage payment she had enough income to pay the bills, but not much more. She was living month to month and relying on Social Security income and a small pension. Rather than taking out a traditional mortgage and being burdened with a mortgage payment that she couldn't afford,Claire decided to keep living month-to-month.

She finally spoke with a Senior Lending advisor who advised her that her home' s value of $225,000 qualified her for a $121,175 Credit Line. The HECM Credit Line helped Claire feel secure knowing that she never had to make a mortgage payment when she withdrew her money. Claire breathed a sigh of relief because she finally did not have to live month-to­ month anymore. Now she was able to live the retirement she always wanted and remain in her home.