By Chris Hopkins
Many homeowners have seen TV commercials featuring popular personalities touting the benefits of reverse mortgages. These are legitimate arrangements that allow qualifying individuals to withdraw equity from their house to be used in any manner they wish, without the obligation to make monthly payments or to repay the balance as long as they occupy the home.
The home equity conversion mortgage, or HECM, was created by the Federal Housing Authority and carries the imprimatur of the federal government. Under the HECM program, a homeowner who is at least 62 years old can access a substantial percentage of his home equity to use for living expenses, medical payments, repairs or virtually any other purpose.
Once the home is sold, the lender is repaid from the sale proceeds. Any residual value in excess of the loan amount is retained by the seller or the seller’s heirs. Furthermore, no credit check or proof of income is required.
To qualify for an