There are three kinds of reverse mortgages: proprietary reverse mortgages, single-purpose reverse mortgages, and home equity conversion mortgages.
Home equity conversion mortgages
HECM’s, also known as home equity conversion mortgages, are, by far, the most popular reverse mortgages. Home equity conversion mortgages are insured by the FHA, although the funds still come from a private lender. You’ll be required to obtain borrower counseling prior to getting a home equity conversion mortgage.
Single-purpose reverse mortgages
A single purpose reverse mortgage is different from additional reverse mortgages because a lender will specify what the funds may be used for, like home renovations. They’re available through some local or state government agencies and non-profits, according to the Federal Trade Commission.
Proprietary reverse mortgages
A proprietary reverse mortgage is a kind you are likely to get if you go through private lenders. They are not subject to the exact same regulations and rules which govern federally-backed reverse mortgages. They may be a better bet for high-value home owners who wish to get more of their equity than they would get with the federal home equity conversion mortgages program.
How much am I able to receive with my reverse mortgage?
The quantity you’re able to receive with a reverse mortgage from your reverse mortgage specialists is going to vary based upon multiple factors: your age–or age of your spouse, if they are younger–, present interest rates, as well as your house’s value.
In the instance of home equity conversion mortgage loans, a reverse mortgage is capped at $625,500, yet there isn’t any such limitation for non-home equity conversion mortgage reverse mortgages. You generally will be qualified for a larger loan if you are older and the home is worth more.
You only will have the ability to access around 60 percent or the loan within the year upon closing if you get a home equity conversion mortgage, according to the NRMLA, or the National Reverse Mortgage Lenders Association. After year one, you may tap the rest of your loan as you wish.