Choosing The HECM Payout Plan That Is Right For You


If you’re 62 and considering a Home Equity Conversion Mortgage (HECM), often referred to as a reverse mortgage, you may have more flexible options than you realize. Adding a HECM to your retirement strategy also means you can determine the payout plan that will best fit your situation.

While all reverse mortgages rely on your home’s equity for funding, the form they take can vary greatly based on the purpose they are serving. To help inform your decision, we’ve outlined the different payout plan options below.

With a HECM payout plan, no repayment is required as long as the borrower continues to live in the home and the standard homeownership cost is maintained. This would include real estate taxes, insurance and home maintenance.

Single Lump Sum

For those looking to fund a large purchase, pay off debts, use their home equity elsewhere or take advantage of a fixed-rate loan that doesn’t have to be paid back until you leave the home, a lump sum payout is available via HECM. Your age and home value will determine the amount you are eligible for, and it will be accessible as soon as the loan is funded. Note that amounts available under this plan may be limited.

Tenure payout

If your desire for a reverse mortgage is predicated on a need for additional reliable retirement income, the tenure payout option could be a good fit. Under this payout plan, you will receive equal monthly payouts for as long as you live in the home. While the payouts may be smaller than other options, they will continue for life unless you leave the home by choice or for health reasons.

Term payout

A term payout plan also offers consistent monthly payouts, but in this case, you choose the length of time you will receive them.  Due to the shorter term, the monthly payouts will also be larger than a tenure plan. Term payouts can be a viable option for retirees who have plans to leave the home at a certain age and want to maximize their HECM.

Line of Credit

Homeowners who currently don’t need to access their home equity to achieve their retirement goals may still benefit from a HECM. The line of credit option makes their home equity available to them in the event of an unexpected expense, but there is no requirement to borrow the money. Also, any unused credit will grow over time, making it a flexible, and sometimes vital, tool for retirement planning and long term security.

Modified Tenure & Modified Term

For those looking for a more customized option, modified tenure and modified term payout plans combine the traditional offerings with the line of credit alternative. A modified tenure plan features a line of credit with monthly payouts for as long as you live in the home. A modified term plan offers monthly payouts over a predetermined time along with the line of credit.

To find out more about how a Reverse Mortgage can work for you call Melinda Hipp , CRMP with Open Mortgage at 210-493-7332, email at or visit to learn more.

More about Melinda Hipp and Open Mortgage -

Melinda Hipp is Branch Manager with Open Mortgage|San Antonio and specializes in working with senior homeowners 62 and over who would like to access the equity in their home through a Reverse Mortgage. She has handled hundreds of satisfied Reverse Mortgage clients over the past ten years with many raving fans. She and her team are dedicated to giving you boutique service, a quick closing and personalized customer service.

Melinda regularly provides training to local real estate professionals and holds the designation of MBA, CRMP (Certified Reverse Mortgage Professional) and CMC (Certified Mortgage Coach.) Melinda is also an active member of NRMLA (National Reverse Mortgage Lender’s Association). An avid golfer, Melinda was a charter member of the San Antonio Chapter of the Executive Women’s Golf Association. She is currently a member of the National Reverse Mortgage Lender’s Association, Women’s Council of Realtors, San Antonio Board of Realtors, CRS and a board member of Golf San Antonio.

Melinda Hipp, CRMP | NMLS #219085

1870 W. Bitters Rd., Ste. 202
San Antonio, TX 78248
Office: 210-493-7332
Toll Free: 844-265-5513 | |

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