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Reverse Mortgage Glossary

Tenure

Tenure payments distribute the proceeds from a variable-rate HECM in the form of a monthly paycheck that is guaranteed for life, regardless of how long you live. Because tenure payments come with the lifetime guarantee, they’re often lower than what you might receive with a term payment plan.

Tenure payments are calculated based on the assumption that you’ll live to age 99, but they’re guaranteed to continue even if you live longer than that.

Tenure payments are also guaranteed to continue even if you use up all of the equity in your home. Because the HECM reverse mortgage is a non-recourse loan product, you, your heirs, and your estate are not the hook for the shortage if there’s not enough value in the home to pay back the entire loan balance.

You can select to receive 100% of the proceeds in the form of tenure payments or take tenure along with some combination of lump sum or line of credit. This is one of the reasons the HECM can be a powerful financial tool; it can be customized to best suit your financial goals and situation.

Note that the fixed-rate HECM only offers the option of taking the proceeds as a lump sum. No tenure payment option is available.

Expert Tip

Picking the right payment plan, whether it’s tenure or some length of term, can be a little intimidating sometimes. Don’t feel like you’re stuck for the rest of your life with whatever payment plan you select at the start of the loan. The HECM is designed to change with your needs over time. If you need to restructure your payments or take out a lump sum, you can do that with a simple phone call to your lender.