A Home Equity Conversion Mortgage is a unique kind of reverse loan that has grown in popularity over the past few decades. Designed specifically for older adults, this loan is issued by private banks and insured by the Federal Housing Administration, and serves as a special financial tool for those over the age of 62. An HECM is a versatile retirement option that provides for a lot of added benefits. Here are six ways in which an HECM can be used.
Remodel Your Home
As you age, your physical needs change. You may have a harder time walking up the stairs or reaching objects in high-up places. For these reasons, an HECM is a great way to fund remodeling projects for your home. An HECM is a great way to fund a total home renovation to make your dwelling more accommodating to your physical demands.
Pay for Health Insurance
An HECM can also be used to cover healthcare costs until you are Medicaid eligible at age 65. If you are on the younger side when you retire, it may be difficult to fund the out-of-pocket healthcare costs. An HECM can help you fund your health insurance until your Medicaid benefits kick in.
Pay for College
Another benefit of an HECM has money to put towards your children or grandchildren’s college education. Let’s face it – advancing your education is expensive. Depending on the school and the location, college tuition costs can range from $15,000 – $80,000 or more a year. An HECM can help fund a college education or professional development opportunity.
Transportation
HECM reverse mortgages can also be used to fund transportation when you are no longer comfortable being behind the wheel. As you age, it becomes more difficult to drive – especially at night. In light of your well-being and safety, it may be feasible to use HECM funds to pay for other transportation options when you decide you no longer wish to drive.
Eliminate Debt
There is nothing worse than credit card debt – especially when you hit the retirement era. Rather than being stuck in a tough financial situation,
HECM Reverse Mortgages can help you pay off existing credit card debt and reduce the likelihood that you will build up any further debt in the future.
Pay for Long Term Care
As you age – especially if you live alone – it may become more difficult to complete everyday tasks on your own. HECM reverse mortgages can provide the funding needed to purchase medical equipment or technology that make daily living a bit easier. An HECM can also be used to pay for other long-term care costs within the home.
