Consider Different Reverse Mortgage Options

Consider Different Reverse Mortgage Options



Consider Different Reverse Mortgage Options
There are many different reverse mortgage options: single purpose reverse mortgages,​ federally insured reverse mortgages,​ and proprietary (private sector) reverse mortgages .​
Each option has different pros and cons that need to​ be considered when looking into taken out a​ reverse mortgage .​
Single-Purpose Reverse Mortgages
A single purpose reverse mortgage is​ the​ lowest-cost type of​ reverse mortgages to​ obtain,​ but as​ the​ name indicates it​ can only be used for one specified purpose .​
They are typically offered by state or​ local government agencies .​
These loans a​ great for individuals who need cash for a​ specific purpose like paying property taxes or​ fixing up there homes .​
Here are descriptions for several different types of​ single purpose reverse mortgages:
Property tax deferral (PTD) mortgages are reverse mortgages that provide loan advances for paying property taxes.
Deferred payment loans (DPLs) are reverse mortgages providing lump sum disbursements for repairing or​ improving homes.
Federally Insured Reverse Mortgages
A federally insured reverse mortgage is​ the​ only reverse mortgage insured by the​ Federal Housing Administration (FHA) .​
These reverse mortgage are one of​ the​ lowest-cost multipurpose reverse mortgages currently available .​
Overall they typically provide the​ largest total cash benefits of​ all the​ reverse mortgage options .​
The proceeds from a​ federally insured reverse mortgage can be used for any purpose .​
These loans are also known as​ Home Equity Conversion Mortgages (HECMs).
Proprietary Reverse Mortgages
A proprietary reverse mortgage is​ a​ mortgage product owned by a​ private company .​
These type of​ loans are more expensive then the​ other reverse mortgage types and should be approached with caution .​
Anyone looking into these type loans should get a​ comparison with a​ similiar HECM .​
One benefit of​ proprietary reverse mortgages are the​ higher home value limits .​
So,​ if​ you​ live in​ a​ home that is​ worth a​ lot more than the​ average home value in​ your county,​ a​ proprietary loan may give you​ greater loan advances than a​ Home Equity Conversion Mortgage (HECM).
As with any financial decision,​ you​ should get professional help to​ help you​ decide which option is​ best for your situation .​
Reverse mortgage counselors can help you​ evaluate each of​ your options and help you​ make an​ informed decision.




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