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Let's talk a little HECM!
Posted on 12/16/25 at 11:19 am
Posted on 12/16/25 at 11:19 am
As in a Home Equity Conversion Mortgage (HECM).
Good Article
A reverse mortgage (HECM) can be a useful retirement planning tool for homeowners age 62+. It allows you to convert part of your home equity into cash while eliminating monthly mortgage payments, giving you more flexibility for travel, healthcare, or everyday expenses. The advantages are clear: improved cash flow, the ability to stay in your home, and a line of credit that grows over time.
But there are limitations—upfront costs are higher than traditional loans, your equity will decline as interest accrues, and you must keep up with property taxes, insurance, and maintenance. In short, it’s best suited for those planning to stay in their home long-term who want lifestyle flexibility now, while understanding the trade-off with legacy equity later.
We are thinking about it because it lets you tap into your home equity for cash flow without monthly mortgage payments, but it reduces the equity you leave behind. Whether it’s right for you depends on your retirement goals, how long you plan to stay in your home, and your ability to manage ongoing costs like taxes and insurance.
This plan gives you cash flow freedom for travel and experiences now, while still leaving heirs both a valuable rental property and significant equity in your home. It balances lifestyle enjoyment with legacy preservation.
Good Article
A reverse mortgage (HECM) can be a useful retirement planning tool for homeowners age 62+. It allows you to convert part of your home equity into cash while eliminating monthly mortgage payments, giving you more flexibility for travel, healthcare, or everyday expenses. The advantages are clear: improved cash flow, the ability to stay in your home, and a line of credit that grows over time.
But there are limitations—upfront costs are higher than traditional loans, your equity will decline as interest accrues, and you must keep up with property taxes, insurance, and maintenance. In short, it’s best suited for those planning to stay in their home long-term who want lifestyle flexibility now, while understanding the trade-off with legacy equity later.
We are thinking about it because it lets you tap into your home equity for cash flow without monthly mortgage payments, but it reduces the equity you leave behind. Whether it’s right for you depends on your retirement goals, how long you plan to stay in your home, and your ability to manage ongoing costs like taxes and insurance.
This plan gives you cash flow freedom for travel and experiences now, while still leaving heirs both a valuable rental property and significant equity in your home. It balances lifestyle enjoyment with legacy preservation.
This post was edited on 12/16/25 at 11:22 am
1
Posted on 12/17/25 at 6:02 am to Nole Man
Its the greatest loan ever created
Posted on 12/18/25 at 5:54 am to SDVTiger
your equity will decline as interest accrues
In a market where there's a continued influx of new residents, like here in Middle Tennessee, and appreciation rates may be in the 3-5% range over the time horizon expected (I'm using 15 years), appreciation essentially covers the carrying costs and there'd still be a significant amount of equity left for heirs upon our deaths.
I'm trying to think through what's the downside on doing it.
it.
In a market where there's a continued influx of new residents, like here in Middle Tennessee, and appreciation rates may be in the 3-5% range over the time horizon expected (I'm using 15 years), appreciation essentially covers the carrying costs and there'd still be a significant amount of equity left for heirs upon our deaths.
I'm trying to think through what's the downside on doing it.
it.
Posted on 12/18/25 at 6:08 am to Nole Man
Nothing unless you care about heirs
But even then based of your projections of appreciation and I would use the 3% since thats closer to the 100yr national average, you will either have the same equity position or more when the time comes
You can also always make a few payments every year to the loan to throw off the deferment.
And if you have credit line availability or forced line in the first 12mnths that also has a growth rate. Depending on how much growth you can get that can be added to your yearly income
But even then based of your projections of appreciation and I would use the 3% since thats closer to the 100yr national average, you will either have the same equity position or more when the time comes
You can also always make a few payments every year to the loan to throw off the deferment.
And if you have credit line availability or forced line in the first 12mnths that also has a growth rate. Depending on how much growth you can get that can be added to your yearly income
Posted on 12/18/25 at 6:35 am to SDVTiger
quote:
Nothing unless you care about heirs
Thanks. Heirs have gotten, and will get theirs in the end.
I want my money. Ain't gettin' any younger.ger.
Posted on 12/18/25 at 6:46 am to Nole Man
enjoy its the best loan
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