Question:

What are the HECM lending limits?

Answer:

HECM lending limits are tied to the FHA loan limits for your area or the appraised value of your home, whichever is less. Thus, owners of higher priced homes cannot borrow with a HECM more than the FHA loan limit for the area. Additionally, the amount you will receive depends on the interest rate and your age. Also, HECM lending limits will depend on the age of the youngest co-borrower, if borrowers are more than one.

Generally, HECM lending limits for you will be around 25% of your equity if you are 65, around 40% if you are 75, and around 60% if you are 85. Closing costs are omitted from this approximation.

HECM payment plans may vary among tenure (monthly payments for as long as one of the borrowers remains living on the property); term - monthly payments for a fixed number of months; line of credit, and a combination of those.

HECM payments may be restructured for a small nominal fee should borrowers' circumstances change.

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