One of the valuable features of the HECM reverse mortgage is that it offers multiple options for drawing funds, which can be used singly or in combination to meet a wide variety of senior needs. If this were better understood and exploited, the HECM market would be many times larger than it is. This article matches each of a variety of senior needs with the HECM option that can be used to help meet the need. It can be viewed as a senior’s first step in determining whether a HECM might help them. Step 2 is to determine how much they can draw on specific HECM options or combinations of options. They can do this at HECM Reverse Mortgage Calculator, with expert guidance if they need it, but without being hustled by loan providers. If you have a standard mortgage, the HECM reverse mortgage rules require that you pay it off when you take a HECM. If your capacity to make the payments on your existing mortgage has been impaired by your retirement, sickness or something else, the shift to a HECM may make good sense.

It replaces debt that must be repaid in monthly installments with debt that doesn’t have to be repaid until you die or move out of the house permanently. If the balance of your existing mortgage is small relative to the total amount of cash you can draw, you retain all your options. You can use your remaining HECM borrowing power to meet any of the other needs discussed here, using any of the HECM options. If your existing balance is so large that paying it off uses all or most of your HECM borrowing power, paying it off is the only use you can make of the HECM. You lose the ability to draw spendable cash from the HECM in later years. In that situation, you should consider an alternative strategy of delaying the HECM until the existing mortgage has been paid off out of your current income. That may require that you defer retirement, but it will pay off big in the future.