Title:
Consider
Different Reverse Mortgage Options
Word Count:
359
Summary:
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 specif...
Keywords:
reverse mortgage,
reverse mortgages, mortgage, mortgages
Article Body:
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.