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Replace Your Forward Mortgage With a HECM

How would the Smiths financial options change if they replace their traditional mortgage and HELOC with a HECM while continuing to make the same payment on the HECM?

  1. Home value: $500,000
  2. Payoff 1st Mortgage: $125,000
    • 10 more years @ 4.125%
    • Payment = $1,273.00
  3. HELOC balance – $55,000 used of $75,000
    • 10 more years @7%
    • Payment = $638.60
  4. Youngest borrower: 62
  5. Monthly Total = $1,911.60
This example will show what happens if the Smiths make the exact same payment on a HECM as they would have been making on their traditional forward mortgage.