Compare HECM to HELOC

Choosing the right way to access your home’s equity can feel overwhelming. Let’s take a look at the key differences between HECMs and HELOCs, so you can be empowered to make an informed decision for your financial future.

Home Equity Conversion Mortgage (Reverse Mortgage)

A reverse mortgage, or HECM, is a loan that replaces your existing mortgage. It allows you to tap into your home’s equity without monthly mortgage payments, offering access to cash and potentially enhancing your retirement income.

Benefits of a HECM

		Elimination of Monthly Mortgage Payments
Access to Tax-Free Funds
No Repayment Required During Your Lifetime (in most cases)
Potential for a Line of Credit
		
	

Home Equity Line of Credit (HELOC)

A HELOC is a revolving loan that is secured by the value of your home with spending limitations similar to that of a credit card. You may not exceed the maximum credit limit and, similar to a traditional mortgage, you will make monthly payments for a fixed term. It is set up in addition to and independent of your current mortgage.

Benefits of a HELOC

Low interest rates in most cases
Lower upfront costs
May be more suitable for short term-needs

Call or click to connect with a Bates Reverse Mortgage Advisor and review your reverse mortgage refinance options.