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Home Equity Line Of Credit (HELOC) vs. Reverse Mortgage (HECM)

Many of my clients initially come to me considering a Home Equity Line Of Credit. With Home Equity interest income no longer tax-deductible the reverse mortgage product now looks like a more attractive option.

One of the many home-related tax breaks you were able to take advantage of was the interest deduction allowed for home equity loans or home equity lines of credit (HELOC). That is no longer going to happen. The new tax law eliminates this deduction. This change applies to new and existing home equity loans.

Combined with rising interest rates, your existing HELOC could also reset, resulting in a new, much higher payment; but now you’ll also lose the ability to deduct the interest – many of you were probably just making the interest payment.

Let’s see how the reverse mortgage stacks up against the HELOC:

The biggest distinction between the two products is that the unused portion of a reverse mortgage credit line increases over time, so you’ll have access to more funds than what was initially made available at the inception of the loan.

Let’s see how that works:

Reverse Mortgage Creditline
SAMPLE AMORTIZATION SCHEDULE
$120,000 Initial Amount / 5.09% Compounding Rate


* Credit line continues to grow, even if home value remains flat or decreases – it’s not tied to property value… Now might be a good time to consider or reconsider a reverse mortgage (HECM). If you have any questions or would like a quote feel free to contact me anytime or use our online calculator to get more information.

Hi,

My name is Russell and i am your local licensed reverse mortgage expert.

This is only one segment of a broad reverse mortgage program. My job is to educate people on the entire reverse mortgage program.

Please call or email me with additional questions.

 

Russell S Tunick
Senior Finance (NY, NJ, CT, PA & FL)
149 Madison Ave New York, NY 10016
Office: (888) 588-0944 
Cell: (917) 538-7177
Fax: (888) 697-1729
NMLS# 305398
www.seniorfinance.com
Available Mon-Fri 8AM – 9PM & Weekends
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Licensing

NMLS # 93443
NY, Dept. of Financial Services #A005375
NJ, Dept. of Banking & Insurance #9926426
CT, Dept. of Banking #10652
PA, Banking Dept. #45595
FL, Office of Financial Regulation #MBR104

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Senior Finance

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