What is the difference between a HELOC and a HECM Loan?

The Ideal HELOC Substitute for Seniors

If you're 62 or older, plan on living in the same home for several years, and are interested in keeping more money in your pocket, a Home Equity Conversion Mortgage (HECM) may be a great option for you. Not only do HECM Loans provide eligible borrowers with the option to never make monthly mortgage payments, but they also offer low interest rates, flexible terms, no annual fees, and more. Check out the details below to learn more about HECM Loans and how they compare to Home Equity Line of Credit (HELOC) Loans.

	HECM	HELOC
Payments	No monthly mortgage payments are required	Monthly mortgage payments are required
Receiving Money	Money can be received through a credit line, lump sum, a steady stream of monthly payments, or a combination	Money can be received through a credit line only
Future credit line	Future credit line is guaranteed, credit line increases over time	Credit line may be cut or suspended by the lender, never increases regardless
Non-recourse loan protection	Non-recourse loan protection in place (meaning the borrower will never owe more than the home is worth)	No non-recourse feature
Lifetime rate cap	5-10% above initial rate	Up to 24% above the initial rate

If you are interested in learning more about a Home Equity Conversion Mortgage, just fill out some simple information in the form below and we’ll have a qualified Veritas Funding HECM specialist reach out to you as soon as possible.

We don't sell your information and it will be a one-on-one conversation between you and a licensed Veritas Funding Loan Officer.