Reverse Mortgages That You Can Apply For Senior Citizens : Learn About the 3 Main Types
Homeowners with low and moderate incomes can get cheaper single purpose reverse home mortgages which can be used for certain specified purposes only. With this type of a mortgage loan, you can undertake repairs at home or renovate it, pay monthly mortgage instalments that are due or property taxes. Reverse mortgages of this type cannot be used for any other purpose than the stated ones.
Borrowers can also apply for federally insured reverse home mortgages which are commonly known as Home Equity Conversion Mortgages or HECMs. A HECM loan is a HUD approved mortgage and to get it, borrower must have attended a session conducted by a HUD counsellor for understanding the process as well as for exploring various low rate reverse mortgage loan options. Nevertheless, the overall costs involved in getting HECMs can be extremely high but they can be used for any purpose.
The third type of senior reverse mortgage is the proprietary reverse mortgage that is similar to the HECM as far as use and cost is concerned. However, this type of reverse mortgage can be secured from loan dealers which are not HUD approved. In any case, getting a proprietary reverse mortgage loan could be the most viable option for homeowners who want to borrow loans with amounts exceeding $625,500 allowed by HUD.