Equity takeout refers to the process of refinancing a property mortgage primarily to raise cash. This results in an increase in the debt secured by the property while leveraging the equity built into the home.
A HECM (Home Equity Conversion Mortgage) is a type of reverse mortgage that allows homeowners aged 62 and older to convert part of the equity in their homes into cash without having to sell the home or making monthly mortgage payments.
A Home Equity Conversion Mortgage (HECM) allows older homeowners to access some of the equity in their homes, either in the form of monthly payments for life or a fixed term, or as a lump sum or line of credit. This reverse mortgage product is insured by the Federal Housing Administration (FHA).
A Reverse (Annuity) Mortgage is a type of mortgage designed primarily for elderly homeowners with substantial equity in their homes. The lender periodically pays an amount to the borrower, with the loan balance increasing over time due to interest and periodic payments, ultimately resulting in negative amortization. The nonrecourse loan is repaid from the proceeds of a future sale of the home.
