There are three types of reverse mortgages:<\/p>\n
Single-purpose reverse mortgages are the least expensive option. They are not available everywhere and can be used for only one purpose, which is specified by the government or nonprofit lender. For example, the lender might say the loan may be used only to pay for home repairs, improvements, or property taxes. Most homeowners with low or moderate income can qualify for these loans.<\/p>\n
HECMs and proprietary reverse mortgages may be more expensive than traditional home loans, and the upfront costs can be high. That\u2019s important to consider, especially if you plan to stay in your home for just a short time or borrow a small amount. HECM loans are widely available, have no income or medical requirements, and can be used for any purpose.<\/p>\n
Before applying for a HECM, you must meet with a counselor from an independent government-approved housing counseling agency. Some lenders offering proprietary reverse mortgages also require counseling. The counselor is required to explain the loan\u2019s costs and financial implications, and possible alternatives to a HECM, like government and nonprofit programs or a single-purpose or proprietary reverse mortgage. The counselor also should be able to help you compare the costs of different types of reverse mortgages and tell you how different payment options, fees, and other costs affect the total cost of the loan over time. To find a counselor, visitwww.hud.gov\/offices\/hsg\/sfh\/hecm\/hecmlist.cfm<\/a>\u00a0or call 1-800-569-4287. Most counseling agencies charge around $125 for their services. The fee can be paid from the loan proceeds, but you cannot be turned away if you can\u2019t afford the fee.<\/p>\n How much you can borrow with a HECM or proprietary reverse mortgage depends on several factors, including your age, the type of reverse mortgage you select, the appraised value of your home, and current interest rates. In general, the older you are, the more equity you have in your home, and the less you owe on it, the more money you can get.<\/p>\n The HECM lets you choose among several payment options. You can select:<\/p>\n You can change your payment option any time for about $20.<\/p>\n","protected":false},"excerpt":{"rendered":" Types of Reverse Mortgages There are three types of reverse mortgages: single-purpose reverse mortgages, offered by some state and local government agencies and nonprofit organizations federally-insured reverse mortgages, known as Home Equity Conversion Mortgages (HECMs) and backed by the U. S. Department of Housing and Urban Development (HUD) proprietary reverse mortgages, private loans that are …<\/p>\n\n