GROWING LINE OF CREDIT (this will be detail page for LOC)
The HECM Line of Credit (LOC) is perfect for seniors who may not have an immediate need for cash but want the security of being able to have quick access to it should they need it in the future.
The HECM LOC is the only product that allows that line of credit grow every year, guaranteed, and gives you instantly access cash at any time tax-free and without penalties. There is no other product in the world that offers such guaranteed growth, flexibility and protection.
Guaranteed increase every year
Your credit line will increase each year at the prevailing rate (typically 5%) even if it exceeds the value of the home.
Tax-free money to use on anything you like
Travel, In-Home Care, Long Term Care, Unexpected Emergencies, College Tuition, Inheritance
Cannot be terminated by the lender due to market conditions or home values
Unlike a traditional home equity line of credit (HELOC) which can be limited or cancelled at any time by the lender, the HECM LOC cannot be limited in any way and is due once the home owner sells
the house or passes away.
No required monthly payments
You can make monthly payments if you wish but it is not required.
Pay back after the house is sold
The LOC can be paid back after the house is sold.
Easy qualifying guidelines
This loan does not require the typical income and credit qualifying guidelines associated with other
Many seniors are getting a reverse mortgage, even though there is no immediate need for cash, for the benefit of an increasing line of credit that will always be available in the future if/when needed.
Real Life Example:
A married couple, both at age 65 owned their home free and clear, had stable retirement income, considerable savings and reasonable assets in their 401(k). They did not have an immediate need for cash but were drawn to the idea of a growing line of credit which could be accessed in the future if desired.
They acquired the HECM LOC for the amount of $300,000 knowing they had no payment or obligation until funds were accessed in the future. With rates averaging 5%, here is how their credit line will increase over the years to come.
In 5 years, at age 70, their available funds will be $382,000
In 10 years, at age 75, their available funds will be $488,000
In 15 years at age 80, their available funds will be $623,000
In 20 years at age 85, their available funds will be $796,000
This is tax-free money to use for whatever they wish with no monthly payments or requirement to pay back until the house is sold.