According to our reverse mortgage lenders, as you think about whether reverse mortgages are the right option for you, you should also consider which of the three kinds of reverse mortgages may better suit you.
Single-purpose reverse mortgage
They’re the cheapest choice. They are provided by some local and state government agencies, and some non-profits, yet they aren’t available everywhere. The loans might be only used for one purpose, specified by the lender. For instance, the lender may state that the loan might be used only to fund house repairs, property taxes or improvements. Many homeowners who have moderate or low income are eligible for such loans.
Proprietary reverse mortgage
They’re private loans backed up by the businesses which creates them. If you have a higher valued house, you might receive a larger advance from proprietary reverse mortgages. Therefore, if your property has a high appraised vffalue, and you are paying a small mortgage, you may be eligible for more money.
HECMs include reverse mortgages that are federally insured and backed by the HUD. Such loans may be utilized for any reason.
A proprietary reverse mortgage and HECM might be costlier than a traditional home loan, and upfront expenses might be high. That is critical to consider, particularly if you’re prepared to remain in your house for a brief period or borrow only a small amount. The amount of money you’re able to borrow with proprietary reverse mortgages or HECM depends upon several issues:
* your age,
* the kind of reverse mortgages you choose,
* home’s appraised value,
* current interest rates, and
* a financial evaluation of your ability and willingness to pay homeowner’s insurance and property taxes.
Generally, the older you are, you should have more equity in the property and owe less. Therefore, the more funds you’ll be able to receive.
Prior to applying for the HECM, you have to meet with an independent counselor who is approved by the government. Also, some reverse mortgage lenders providing a proprietary reverse mortgage need to be counseled.
Your counselor must discuss the loan’s financial implications and costs. Also, the counselor has to explain the probable alternatives to HECMs – such as non-profit and government programs, or proprietary or single-purpose reverse mortgages. Also, the counselor should have the ability to assist you in comparing the costs of various kinds of reverse mortgages and inform you how various payment options, charges, and other expenses affect the overall cost of the loan over a period of time.
For more information on our reverse mortgage lenders, contact Longbridge Financial today.