HECM or the HomeKeeper?

Which type of reverse mortgage is better for me, the HECM or the HomeKeeper?

This article will not give you answers conclusively but will give you an idea of which one might be better for you.

Two examples are presented below. Example #1 shows a better deal on amount of cash available with a HECM. Example #2 shows a better deal on amount of cash available with the HomeKeeper.

Example #1:

The following numbers are based on a person with a birthdate in 1933 and whose home is estimated to be worth $100,000. As you can see, simply put, if you have a home worth up to $350,000 (or thereabouts) you will come out with more money with a HECM.

A comparison follows:

1) A single lump sum advance of
HECM $61,704
HomeKeeper $33,455

2) OR a creditline account of
HECM $61,704
HomeKeeper $33,455

,,,that grows larger each year by
HECM 5.29%
HomeKeeper 0%

...so, if unused, available credit in 5 years would be
HECM $79,862
HomeKeeper $33,455

...in 10 years would be
HECM $103,363
HomeKeeper $33,455

3) OR a monthly loan advance for as long as you live in your home
HECM $394
HomeKeeper $289

4) OR any combination of lump sum at closing, creditline account, and monthly advance

Example #2:

The following numbers are based on a person with a birthdate in 1933 and whose home is estimated to be worth $350,000. If your home is worth $350,000, then the HomeKeeper will give you more money at closing.

A comparison follows:


1) A single lump sum advance of
HECM $130,765
HomeKeeper $132,144

2) OR a creditline account of
HECM $130,765
HomeKeeper $132,144

...that grows larger each year by
HECM 5.29%
HomeKeeper 0%

...so, if unused, available credit in 5 years would be
HECM $169,244
HomeKeeper $132,144

...in 10 years would be
HECM $219,047
HomeKeeper $132,144

3) OR a monthly loan advance for as long as you live in your home
HECM $836
HomeKeeper $1,143

4) OR any combination of lump sum at closing, creditline account, and monthly advance

(The above charts and the following information was taken from AARP’s reverse mortgage information pages. This is the link: http://www.rmaarp.com/.)

These comparisons only include the HomeKeeper and the HECM.

Important Information About These Figures:

If you currently owe any debt on your home, and do not pay it off before getting a reverse mortgage, you must take at least that amount as a lump sum advance at closing, and use it to pay off your debt at that time. This would reduce the amount of cash available to you in a single lump sum, creditline or monthly advance. If you do not qualify for enough cash to pay off any debt on your home at closing, you cannot get a reverse mortgage.

For example, if you still owe $20,000 on a mortgage or home equity loan and do not pay it off before closing a reverse mortgage, you would have to qualify for at least $20,000 in a lump sum from a reverse mortgage, and then use it to pay off your debt at closing. If you qualify for more than $20,000, you could take the rest in cash at closing, leave it in a creditline, or take it as monthly advances.

All estimates on this page are based on monthly-adjusting interest rates in the HECM program, maximum origination and servicing fees, and an approximate national average closing cost total. Interest rates are current for the week of December 11th, 2007. Actual loan amounts available depend on the rates in effect when a loan is closed, and the actual origination fee and closing costs charged. Actual loan amounts available also depend on the appraised value of your home and current equity limits in each program. These estimates reflect Fannie Mae's year 2005 equity limit and the 203-b equity limits from HUD's web site as of December 10. HUD limits are subject to change during the year.

Creditline growth projections show maximum potential future available credit assuming continuation of the current creditline growth rate (which could increase or decrease) and no creditline draws. The more credit you use sooner, the less cash will remain available. To see how credit used affects cash remaining, click

All of the figures on this "Loan Estimates" page are provided for illustrative and educational purposes only.