How do home equity and HECM loans differ?
A. With a home equity loan you begin repaying the loan as soon as the loan is taken out. Usually within thirty days of the closing, you start paying monthly payments on the money drawn against the loan. In addition, you must provide proof that you have the monthly income to qualify for a home equity loan and you may be required to qualify again every year. With a HECM loan, there are no monthly payments to be made at any time during the loan for as long as you continue to occupy the home as a primary residence. There are no monthly income requirements for setting up the program….ever.
