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Different Ways to Use a HECM
A HECM can provide access to home equity in different ways depending on your needs and goals. You can establish a line of credit, receive funds upfront, or use a HECM to purchase your next home.
1. HECM Line of Credit
Access available home equity as needed rather than taking all of the funds at once.
​What makes it different:
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No required monthly mortgage payment*
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Unused available credit may grow over time
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Growth is based on the loan's interest rate and mortgage insurance factors, not home appreciation
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Available funds can be accessed as needs arise
May be useful for:
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Supplementing retirement cash flow
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Creating an emergency reserve
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Future healthcare or care needs
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Reducing the need to sell investments during a market downturn​​
HECM Line of Credit Growth Rate
One unique feature of the HECM Line of Credit is that the unused portion of the available credit line may grow over time.
This growth is not tied to home appreciation, but instead is based on the loan’s interest rate and mortgage insurance factors.
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As the unused line of credit grows, the amount available to access in the future may increase—providing greater flexibility as needs change over time.
2. HECM Lump Sum or Partial Payout
Access a portion of your available home equity upfront for a specific need or financial priority.
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Funds may be taken as a lump sum at closing, subject to HECM program limits and available proceeds. This can be useful when you have a known expense or want to address a specific financial need rather than keeping the funds available for future use.
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The amount you receive becomes part of your HECM loan balance and accrues interest and mortgage insurance over time.
May be useful for:
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Paying off an existing mortgage
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Home improvements
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Healthcare or care expenses
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Build financial reserves
3. HECM for Purchase
Buy a new primary residence using a combination of your own funds and a HECM, without a required monthly mortgage payment.*
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Your next home may not require an all-cash purchase or a traditional monthly mortgage payment.
May be useful for:
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Downsizing
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Move closer to family
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Relocate for retirement
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Choose a home better suited for aging
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Preserve more of your savings
Important to Know
*HECM borrowers must meet program requirements and continue to pay property taxes, homeowners insurance, and applicable HOA dues, maintain the home, and occupy it as their primary residence.
Exploring Other Reverse Mortgage Options?
HECM isn't the only reverse mortgage option. Proprietary and second reverse mortgages may provide additional flexibility for higher-value homes or homeowners who want to keep an existing first mortgage in place.
NEXT STEPS
Which Option Is Right for You?
Every homeowner's situation is different. We can help you understand the available options and determine which approach may fit your goals.
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Call (888) 225-3336 or schedule a consultation.
