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The “Flex Pay” LOC offers a choice of mortgage payments and is safer than a HELOC

FLEX PAY EXPLAINED

In a market with rising interest rates a traditional Home Equity Line of Credit (HELOC) can be a scary thought for a retiree living on a set income.  If rates rise, or more money is taken out, then the minimum payment required also rises, which may cut too deeply into monthly income.  There is another option for retirees, the “Flex Pay” Line of Credit on the Home Equity Conversion Mortgage (HECM).  With the “Flex Pay” retirees 62 and older can choose to make a monthly payment as small or as large as they like.   If rates rise or lower, or if more money is taken out, there is no change in their monthly payment needed.  The payment is set completely at will of the borrower, and if they elect to go on a cruise instead of making a monthly payment there is no penalty whatsoever.

SAFETY

This “Flex Pay” option on the HECM loan just might be the safest HELOC available.  It guarantees the homeowner(s) can never lose their home due to non-payment.  The homeowners have to maintain their home in proper repair, pay their property taxes and home insurance.  When these things are done, they are guaranteed to be able to live in their home for life, and pass on any remaining equity to their heirs.  Any unused money in the “Flex Pay” HECM LOC grows by over 5% compounded annually.

FLEX PAY LOC VERSUS TRADITIONAL HELOC

In the 2007 market crash, banks rushed to freeze and eventually close HELOC’s on borrowers whose home equity was crashing.  This put seniors with HELOC’s in a tough financial spot, rates were rising, payments were going up, and many lost their homes because they could no longer afford these required higher payments.  The “Flex Pay” HECM LOC is guaranteed and can never be frozen or taken away.  There are no penalties for missing payments or stopping mortgage payments altogether.  This offers retirees the freedom and flexibility to live their lives and use their home equity as they see fit.

To find out more about the safer HECM LOC contact Robert Krepps at rkrepps@hightechlending.com or at 877-567-7476.

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