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HECM Advantage(TM)- Home Equity Conversion Mortgage (HECM) Reverse Mortgages

A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage. Over Ninety-five percent of all reverse mortgages are HECMs. The Federal Housing Administration (FHA) sets limits on how much a HECM reverse mortgage lender may lend you-based on your age, your home's value and location-and what your total loan costs will be. HECM loans give you a wide choice in how you may receive the cash from the reverse mortgage

American Senior Mortgage examined all aspects of the reverse mortgage and its cost structure to identify multiple opportunities to enhance benefits and reduce cost beyond just simply reducing the margin. The result is HECM Advantage(TM) which in most cases offers senior borrowers the most compelling value currently available among all the HECM products and, provides more net available cash, higher credit line growth and more monthly income than the 1% margin products on the market today.

HECM Advantage retains all of the consumer safeguards and features that have helped make the HECM the most popular reverse mortgage product.

For home values under $400,000, HECM products generally provide larger loan advances than other reverse mortgages. [An exception is American Senior Mortgage's Cash Account Advantage Plan reverse mortgage which may offer cash advance opportunities significantly higher than other reverse mortgage products.]

Home Equity Conversion Mortgage (HECM) Frequently Asked Questions

Q. Since federally-insured HECM loans are regulated by the U.S. government, are all HECM loans the same?
A.Yes and no. All HECM lenders must follow HUD rules and many of the loan costs will be the same no matter which reverse mortgage lender you choose.

Q. What are the eligibility requirements for a HECM loan?
A. You, and any other current owners of your home, must be aged 62 or older. The home must be your primary residence. It may be either a single-family residence in a
1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Though some manufactured housing is eligible, most cooperatives and most mobile homes are not. The home must be at least one year old and meet HUD's minimum property standards*. Finally, you must agree to discuss the program with a counselor from a HUD-approved counseling agency.


* Note: If the house is not up to HUD's standards, you may use the HECM loan to pay for repairs that may be required to bring it up to their standards.


Q. Does the location of our home also affect the size of a HECM loan?
A. Yes. The size of a HECM loan depends on the maximum lending limit, which varies by county and is adjusted annually. For 2007, the FHA loan limit varies from a low of $200,160 (for rural areas) to a high of $362,790 (for high-cost metropolitan areas).Go to for HUD's web site to see the lending limit for your particular area.

Q. What are the key benefits of HECM Advantage over traditional HECM?
A. Compared to a traditional HECM, American Senior Mortgage's HECM Advantage offers greater benefits to seniors.

  • Lower overall loan cost

  • Competitive interest rate

  • Access to more cash

  • Greater monthly income

  • Higher credit line growth


Above all, HECM Advantage still retains all of the consumer safeguards and features that have helped make the HECM the most popular reverse mortgage product.

Q. Are there any advantages by taking my HECM loan as a line of credit?
A. Yes. That's because a HECM line of credit continues to grow over time, increasing the amount of cash available to you until you withdraw all of it. That is possible because the remaining balance in your line of credit grows by the same total rate that is charged on your loan balance.

Consider this example. Say you have a HECM line of credit of $150,000 and you withdraw $25,000. The remaining line of credit would be $125,000. If your next withdrawal is a year later you would have more than $125,000 available to you. Here's how it works to your advantage: if the total loan rate is, for instance, 6%, your available credit line would be 6% higher than it was a year earlier. Instead of having $125,000 available you would have $132,500 in your line of credit (6% of $125,000 = $7,500). In this example, you would have an extra $7,500 available to you in year two of your reverse mortgage. A nice added bonus.

Q. How are the interest rates computed for a HECM reverse mortgage?
A. The HECM rates are based on the variable T-Bill (U.S. Treasury bills) interest rate plus margin. It is adjusted either monthly or annually.

Q. Are HECM loans available throughout the U.S.?
A. HECM loans are available in all 50 states, the District of Columbia, and Puerto Rico. (HECM credit line options are available in all states except Texas.)

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