Types of Reverse Mortgage Programs
reverse mortgage gives senior citizens the opportunity to cash in on
the equity they have in their homes. There are three main types of
reverse mortgage programs:
reverse mortgages are offered by government agencies and non-profits.
They are not available in all locations. A single-purpose reverse
mortgage is generally only available to those with low income. These
feature the lowest costs of all reverse mortgage types. However, they
can only be used for one purpose, and that purpose is specified by the
lender. These are commonly used for home repairs or to pay property
Equity Conversion Mortgages (HECMs) are federally insured reverse
mortgages that are backed by the U.S. Department of Housing and Urban
Development (HUD). They have higher costs than the single-purpose
reverse mortgage, but are much more flexible. The money can be used in
any way you choose, and you can receive the funds as monthly payments,
a line of credit, or a combination of the two.
reverse mortgages are private loans backed by a company. These offer
costs and flexibility similar to HECMs, but can potentially get you
more money, especially if your home has a high value.
type of reverse mortgage you should seek depends on a number of
factors. You will need to consider what you plan to use the proceeds
for, how you want them distributed, and how much money you need.
you are going to use the mortgage for something that a single-purpose
reverse mortgage would allow, it may be your best option. Keep in mind,
however, that in order to qualify you must have low to moderate income.
They also may or may not be available in your area. If they arenít, you
will have to consider other options.
your home has high value and you have a large amount of equity in it,
you could get more money from a proprietary reverse mortgage. The
mortgage provider can give you the details on how much you could
potentially borrow. This type of reverse mortgage also allows
flexibility that the single-purpose type does not, so it is good if you
need monthly payments to help make ends meet or wish to purchase
something that is not allowed with a single-purpose loan.
generally offer lower interest than proprietary reverse mortgages, and
they offer the same flexibility in regards to how the proceeds are
distributed and how you may use them. But there are limits to how much
you may borrow with a HECM. If you have high equity and need to borrow
a lot of money, a proprietary reverse mortgage may be better.
reverse mortgage can help with numerous financial problems, allow you
to go on vacation, or help you buy something you need but otherwise
could not afford. Each type of reverse mortgage offers different
benefits and limitations. It is important to educate yourself about the
different types of reverse mortgage available when considering one.If
you would like more information about the reverse mortgage process
please call me or one of my team members at 561-316-6800 or send an
email here: TheMortgageTeam@ChristianPenner.com
will be happy to provide a complete complimentary analysis of the
amount of money you could expect to receive from the best available