Reverse Mortgage Tips: Why a HECM Beats a HELOC

Reverse mortgageWhen it comes to financing home expenses, many older homeowners consider a reverse mortgage. While others prefer a traditional Home Equity Line of Credit (HELOC). It’s a common choice, especially for those with good income and credit. Also, it’s relatively easy to obtain from local banks or credit unions.

For younger homeowners. they usually need short-term financing for projects like a new roof, home addition, or even a dream vacation. A HELOC might seem like a convenient option, especially if they can pay off the loan quickly.

However, many advisors make the mistake of recommending HELOCs to senior homeowners. It’s because thye’re more cost effective upfront when compared to like the Home Equity Conversion Mortgage (HECM). They are reverse mortgages that are federally insured. HELOCs may seem appealing initially, especially for retirees on fixed incomes. But they come with risks that may not be suitable for everyone.

Reverse Mortgage Tips: Why Choose HECM

Here’s why a HECM is a superior choice compared to a HELOC:


Unlike a HELOC, a HECM doesn’t require monthly principal and interest payments. This flexibility is crucial as borrowers age and may face financial challenges. With a HELOC, required payments can strain retirement cash flow and even lead to foreclosure. Additionally, HECM borrowers have the option to receive funds as a lump sum, monthly payments, or a line of credit, providing flexibility to meet their specific financial needs.

reverse mortgage questionsReliability:

A HECM is not subject to freezing, reduction, or cancellation as long as the loan is in good standing. In contrast, HELOC funds may not be available when needed. This usually happens during market downturns when traditional credit lines are often frozen or canceled. This reliability ensures that HECM borrowers can access their funds when necessary, providing peace of mind during times of financial uncertainty.


The HECM line of credit remains available until the youngest borrower’s 150th birthday if they were to live that long. On the other hand, a typical HELOC has a draw period of 10 years, after which the loan amortizes or balloons, potentially putting the borrower’s cash flow at risk. The longevity of the HECM line of credit makes it a viable option for retirees looking to supplement their income or cover unexpected expenses throughout their retirement years.


Unlike a HELOC, a HECM line of credit grows organically at the same compounding rate applied to the loan balance. This growth feature increases borrowing capacity as the borrower ages, providing more financial flexibility over time. Additionally, the growth of the HECM line of credit is not tied to market fluctuations, ensuring a reliable source of funds regardless of economic conditions.

In conclusion, while a HELOC may appear cheaper upfront, it’s essential to consider the long-term benefits and security offered by a HECM. For homeowners, especially retirees, looking for financial stability and flexibility in their later years, a HECM is undoubtedly the superior choice.

Ready to explore your options and secure your financial future? Contact us today to learn more about HECM and how it can benefit you! Whether you’re planning for retirement or need assistance with unexpected expenses, we’re here to help you make informed decisions about reverse mortgage in Myrtle Beach and your financial future.

Call David Stacy Reverse Mortgage Specialist now. We’ll give you the information you need about HECM and reverse mortgages.

David Stacy Reverse Mortgage Specialist
Myrtle Beach, SC 29577
(843) 491-1436

We serve all of Horry County including: North Myrtle BeachCarolina Forest, Socastee, Forestbrook, Conway, Surfside BeachLittle River, Myrtle Beach, Forestbrook