The home equity conversion mortgage (HECM for short) is amongst one of the most popular types of reverse mortgages for the elderly, it allows them to release equity in their home in a number of different payment options.

To qualify for a home equity conversion mortgage, you must be 62 or older and either completely own the property or have a small amount outstanding on the loan that can be paid off with proceeds of that home equity conversion mortgage loan. The home you are using to gain equity must be your chief dwelling so before taking out the HECM plan, you must also have counseling. This must be with a HUD approved counselor that specifies in home equity conversion mortgage services.

You must also have an home that is eligible to apply for a home equity conversion mortgage and these are generally single family homes or town houses, where one of the units is owned by one of the borrower or borrowers.

The maximum claim for the loan is worked out my three factors, these are the age of the person wishing to take out a home equity conversion mortgage, the interest rates and the value of the property.

There are a number of ways that you can choose to receive payments once you have successfully taken out a home equity conversion mortgage, for example you could choose for a set monthly payment delivered for the complete length of time that you still own and live in the property. You could also choose to have a monthly payment that you receive for a number of years chosen at the beginning of the plan.

As with any mortgage claim, there are certain costs that must be paid, and in the case for the home equity conversion mortgage, normally: origination fee, third-party closing fees, loan servicing fees and the interest.