Home Equity Conversion Mortgage (HECM)

What is Home Equity Conversion Mortgage (HECM)?

A type of mortgage that enables older homeowners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a reverse mortgage or a negative amortization mortgage.