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Eliminate the Payments on Your Short-Term Debt
Eliminate the Payments on Your Short-Term Debt

This is not a requirement of the HECM program, but otherwise the pros and cons are very much the same as paying down an existing mortgage. The case is more compelling in the sense that the cost of short-term debt is usually much higher than the cost of a mortgage.

On the other hand, seniors who have excessive amounts of short-term debt may lack budgetary discipline, and paying off the debt with a HECM may be merely the prelude to a new round of short-term debt increases. To avoid this outcome, seniors looking to use a HECM to pay off short-term debt should do it only within the framework of a budgetary plan, if necessary with the help of a financial advisor.