Types of reverse lenders mortgages

When you see if a reverse mortgage lenders is right for you, also consider which of three types of reverse mortgage can best suit your needs.

Single-purpose reverse mortgage is the least expensive option. They are offered by a number of StateGovernment bodies and local, as well as non-profit organizations, but they are not available every where. The loans can be used for a purpose, which in the lender. For example, a lender might say lenders are only used to pay for home repairs, improvements, or property tax. Most of the low-income homeowner or average can qualify for loans.

Reverse mortgage is the exclusive private loans are being supported by the companies thatdeveloped them. If you own a home that has a higher value, you can get a larger loan from aproprietary reverse mortgage. So, if your home has a higher value than the evaluation and you have asmall mortgage, you may qualify for more funds.

Home Equity Conversion Mortgages (HECMs) are Federal reverse mortgage and insurance is backedby the Ministry of housing and urban development (HUD). HECM loans can be used for any purpose.

HECMs and proprietary reverse mortgages may be more expensive than traditional home loans, andthe upfront costs can be high. It is important to consider, especially if you plan to stay in your homein just a short time or borrow a small amount. How much you can borrow with a HECM or proprietaryreverse mortgage back depends on several factors:

your age

the type of reverse mortgage you select

the appraisal value of your home

the current interest rate, and

a financial assessment of the willingness and ability to pay your property taxes and home insurance.

In General, the higher the age, the more equity you have in your home, and the less you owe on it,the more money you can get.

Before applying for a HECM, you must meet with a counselor from a Government advisory bodies to recognize independence. A number of lenders offering proprietary reverse mortgages also requirecounseling.

The counsellor is needed to explain the loan's costs and financial impact. The Counsellor must alsoexplain the possible alternatives to a HECM-like other nonprofit programs and Government, or asingle purpose, proprietary reverse mortgage. The staff can also help you compare the costs ofdifferent types of reverse mortgages and let you know how the different payment options, fees andother costs that affect the total cost of the loan over time. You can access the HUD for a list of staff,or call the Agency at 1-800-569-4287. The Agency usually charged for their services, typically for about $ 125. This fee can be paid from the proceeds of loan, and you can't be turned away if youcan't afford the fee.

With a HECM, are generally no specific income requirements. However, the lender must conductfinancial assessments when deciding to approve and close your loan. They are assessing the readinessand the ability to meet the obligations and requirements of your mortgage. Based on the results, the lender can demand the money be taken from the loan to pay for things like property taxes, homeinsurance, flood insurance (if any). If this is not necessary, you can still agree that your lenders will need to pay this. If you have a "dedicated" or you have agreed to make the loan payments, that amount will be deducted from the amount you receive in loans. You are responsible for maintainingthe property.

The HECM lets you choose among several payment options:

a single disbursement options-this is only available with a fixed interest rate loans, and generally provide less money than other HECM option.

a "Glossary" option – fixed monthly cash advances for a specific period of time.

a "term" option – fixed monthly cash until you live in your home.

a credit line-this lets you draw down the loan at any time, with the amount you choose, until you haveused up the credit limit. This option limits the amount of the interest rate for your loan because youowe interest on credits that you are using.

a combination of monthly payments and a line of credit.

You can change your payment option for a small fee.

HECMs generally provide bigger loan advances you to the total lower cost compared with proprietaryloans do. In the HECM program, a borrower can usually live in a nursing home or other medicalfacility for up to 12 consecutive months before the loan must be repaid. Tax and still pay the loan, andyour home must be maintained.

With HECMs, has a limit on how much you can take out