Myth 1
The bank will own your home.

• You continue to retain full ownership of your home like any other type of home mortgage product.
• Any maintenance or improvement decisions are yours to make as they always have been.
• Simply continue to pay your property taxes and homeowners insurance.

Myth 2
Your home must be mortgage free to be eligible.

• Think of a HECM like any mortgage refinancing. Your existing mortgage balance would be paid off.
• Because of how a HECM is structured, any existing mortgage balance would need to be in the range of 40-60 percent of your home’s value.
• At age 62 the existing mortgage needs to be around 40 percent.
• At age 75 the existing mortgage needs to be around 60 percent.

Myth 3
Only people with financial difficulties need HECM

• Actually, it can be a huge added tool in your retirement tool chest.
• Can provide additional funds not previously accessible to you.
• Pay off outstanding debts, eliminating those monthly payments.
• Working with your financial planner, a HECM can be used to help extend your retirement assets.

Myth 4
Your children/estate will have to pay off the HECM.

• Your children/estate will never have to repay any more than the current value of the home at the time it’s sold.
• If the balance of the HECM is less than the value of the home, then the remaining proceeds would be an asset of the estate.
• The structure of a HECM guarantees that the children/estate will NOT be left with any debt to pay on your home.

Myth 5
I’ve got a HELOC, I don’t need a HECM

There are some major differences between these two mortgage loan products:

• HELOCs require a monthly payment.
• HECM LOCs have no monthly payment requirements.
• HELOCs have a fixed line of credit that will never increase.
• HECM LOCs will continue to become larger over time.
• HELOCs can be decreased or frozen.
• HECM LOCs can never be decreased or frozen.