HECM: Reverse Mortgage Hawaii is a government insured home loan. 

A reverse mortgage in Hawaii enables older homeowners sixty two years old or older to convert part of the equity in their homes into tax-free cash without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgage loans are also easier to qualify in Hawaii than a conventional mortgage. A reverse mortgage is based on the age and equity of the borrower and Not their credit and income.  A Hawaii reverse mortgage is very similar to a conventional mortgage except the payments are differed until the home owner permanently moves out of their home. Payments can be made on the reverse mortgage, if desired, to retain the current equity A reverse mortgage is often used to refinance an existing home loan at a lower fixed rate. The reverse mortgage is aptly named because the payment stream is “reversed.” If you choose instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you. Below are some common questions asked by consumers about reverse mortgages. 

How Much Money Can I Get? Try our Reverse Mortgage CalculatorOur reverse mortgage calculator will estimate the amount of funds you are eligible to receive. They  depend on the age of the youngest borrower, the appraised home value, interest rates and a lending limit of $625,500. In general, the older you are and the more valuable your home the more money you can get. To get a more accurate assessment try our reverse mortgage calculator at: http://www.hawaiimortgage.com/mortgagecalculators.php 

Does My Home Qualify?Eligible property types include single-family homes, 2-4 unit properties, manufactured homes (built after June 1976), condominiums, and townhouses. In general, cooperative housing is ineligible. However, some lenders have developed private programs that lend on co-ops in New York.  

What are My Payment Plan Options?
You can choose to receive the money from a Hawaii reverse mortgage all at once as a lump sum, fixed monthly payments either for a set term or for as long as you live in the home, as a line of credit, or a combination of these. The most popular option has been a fixed rate option but you are required to take all of the benefits in a lump sum.  

My Understanding is that the Unused Balance in the Line of Credit Option Has a Growth Feature. Does that Mean I'm Earning Interest?No, you're not earning interest like you do with a savings account. What the growth rate does is allow you actually to access more of your equity at a rate of .5% over the interest rate incurred. The growth factor takes into consideration that your home has appreciated in value over the past 12 months and that you are one year older. 

How Can I Use the Proceeds from a Hawaii Reverse Mortgage?The proceeds from a Hawaii reverse mortgage can be used for anything, whether it’s to supplement retirement income to cover daily living expenses, repair or modify your home, pay for health care, pay off existing debts, buy a new car or take a "dream" vacation, cover property taxes, and prevent foreclosure. 

How Does the Interest Work on a Reverse Mortgage?With a reverse mortgage, you are charged interest only on the proceeds that you receive. Reverse mortgages either charge a low fixed rate for the life of the loan or a variable interest rate that is tied to an index, such as the 1-Yr. Treasury Bill or the London Interbank Offered Rate (LIBOR), plus a margin that typically adds an additional one to three percentage points onto the rate you're charged. Interest is not paid out of your available loan proceeds, but instead compounds over the life of the loan until repayment occurs. 

Are There Any Special Requirements to Get a Reverse Mortgage? As long as you own a home, are at least 62, and have enough equity in your home, you can get a reverse mortgage. There are no special income or medical requirements.  

What If I Have An Existing Mortgage?You may qualify for a reverse mortgage even if you still owe money on an existing mortgage. However, the reverse mortgage must be in a first lien position, so any existing indebtedness must be paid off. You can pay off the existing mortgage with a reverse mortgage, money from your savings, or assistance from a family member or friend. 

For example: Let's say you owe $100,000 on an existing Hawaii mortgage. Based on your age, home value, and interest rates, you qualify for $125,000 under the Hawaii reverse mortgage program. Under this scenario, you will be able to pay off ALL the existing mortgage and still have $25,000 left over to use as you wish.If, however, you only qualify for $85,000, then you would need to come up with $15,000 from your own savings to get the Hawaii reverse mortgage. Even then, all the money from the reverse mortgage will have been used to pay off the existing Hawaii mortgage. On the other hand, you won't have a monthly mortgage payment anymore. If you find yourself in a deficit situation where you don't have enough money to pay off the existing Hawaii mortgage, you may use funds from a grant or gift from a family member or friend to cover the gap, but you cannot incur a new debt obligation (i.e., loan).  

Will I Lose My Government Assistance If I Get a Reverse Mortgage?A reverse mortgage does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid, any reverse mortgage proceeds that you receive must be used immediately. Funds that you retain would count as an asset and could impact Medicaid eligibility. For example, if you receive $4,000 in a lump sum for home repairs and spend it all the same calendar month, everything is fine. Any residual funds remaining in your bank account the following month would count as an asset. If the total liquid resources (including other bank funds and savings bonds) exceed $2,000 for an individual or $3,000 for a couple, you would be ineligible for Medicaid. To be safe, you should contact the local  Medicaid expert.  

Why Do I Need to Get Counseling?Counseling is one of the most important consumer protections built into the program. It requires an independent third-party to make sure you understand the program, and review alternative options, before you apply for a reverse mortgage.You can seek counseling from a local HUD approved counseling agency or a national counseling agency, such as National Foundation for Credit Counseling (866-698-6322), Money Management International (877-908-2227), Consumer Credit Counseling Service of Greater Atlanta (866-616-3716) and National Council on Aging (800-510-0301). Counseling is required for all reverse mortgages and may be conducted face-to-face or by telephone. If you have any difficulty finding a counselor the loan officers at www.HawaiiMortgage.com can help. By law, a counselor must review (i) options, other than a reverse mortgage, that are available to the prospective borrower, including housing, social services, health and financial alternatives; (ii) other home equity conversion options that are or may become available to the prospective borrower, such as property tax deferral programs; (iii) the financial implications of entering into a reverse mortgage; and, (iv) the tax consequences affecting the prospective borrower’s eligibility under state or federal programs and the impact on the estate or his or her heirs.