Textbook Case of HELOC Reset; HECM is the White Hat

Jennie called me and was concerned that the HELOC (Home Equity Line of Credit) she had with Wells Fargo was going to be reset the first of the year. Her payments were going to increase from $373 per month to over $1,200 per month. She said that she did not have the income to make the increased payment. So we started talking about using the HECM (Home Equity Conversion Mortgage) reverse mortgage to replace her HELOC. She loved the idea plus she would have a credit line that would grow over time and would never be changed or reset.
Jennie’s situation is a textbook case that had many of the benefits of a reverse mortgage. Her charming home in Alameda, CA was appraised at $644,000 so she would receive the maximum from her FHA HECM. Jennie is 74 years old and would pay off her $111,000 HELOC with the reverse mortgage and she would get another $25,000 to pay off her credit cards. She then would have $269,117 in a credit line account. This line would grow at 3.70% and would adjust as her interest rate on the funds she used would adjust. What a deal. That growth would amount to at least $1,000 per month added to her credit line.
The financial assessment that HUD recently implemented on borrowers was no problem for her. She kept her insurance and property taxes current and she kept meticulous records. We took her reverse mortgage application on August 10 and signed closing papers September 17.
Jennie is one happy lady with no monthly mortgage payment and her fears of the resetting HELOC are behind her now.
If you are 62 years old or older or know of someone who is, this may also help you or friends or family. Call Marty Appel at 510.701.2167 or email him at LM_Appel@yahoo.com to talk about your situation.


About Marty Appel

I work with clients who are looking to purchase a home or refinance their existing mortgage using the FHA HECM (Home Equity Conversion Mortgage). I have developed a specialty with over 14 years’ experience in reverse mortgages. I pride myself on my ability to assist older homeowners navigate the reverse mortgage process with ease and confidence. I help seniors improve their financial future and remain in their homes. My technical knowledge of FHA rules and lender policies help clients avoid the pitfalls in the loan process experience. My passion and longevity make me an excellent source of valuable information about everything there is to know about a reverse mortgage.
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