SeniorResource SeniorResource
SeniorResource SeniorResource
  • Housing
    • Senior Housing / Senior Living
    • Assisted Living
    • Cohousing
    • Mobile Homes and Modular Homes
    • Senior Apartments
    • Shared Housing
    • Nursing Homes and Skilled Nursing Facilities
    • Retirement Communities
  • Age In Place
    • Age In Place Overview
    • Aging In Place Specialists
    • Adult Day Care
    • Home Care
  • Elder Law
    • Elder Law
    • Estate Planning
    • Social Security
  • Health and Medicare
    • Medicare
    • Your Health
    • Aging Process
    • Alzheimer's Help
    • Hospice Care
  • More
    • Your State
    • Senior Education
    • Personal Finance
    • Retirement Investing
    • Annuities
X
7 Secrets to a Wealthier Retirement

Get America's #1 Retirement Expert Bob Carlson's new report, FREE of charge.

Get Bob's report, FREE of charge along with a complimentary subscription to Retirement Watch Weekly, delivered to your email inbox each week along with other financial news and offers from our valued partners. We value your privacy.

Reverse Mortgage: 3 Types For Seniors To Know About

Posted by Jaxon Kim Mar 22, 2022

Are you living on a fixed income? Need some help paying bills? A reverse mortgage may be able to help! A reverse mortgage is a loan that enables senior adults, 62 or older, to cash in on acquired home equity. A homeowner is lent money as a line of credit or in one lump sum. Unlike traditional loans, monthly payments aren’t required. Instead, the loan is repaid in full when the home is sold (most commonly when the homeowner passes away).

Considering a reverse mortgage? Start here by first learning about the different types. There are three: home equity conversion mortgages, proprietary reverse mortgages, and single-purpose reverse mortgages.

senior hands holding toy house to represent reverse mortgage

Home Equity Conversion Mortgage

With no income or medical requirements, a home equity conversion mortgage (HECM) is the most common type of reverse mortgage. HECMs are federally backed loans; insured by the Federal Housing Administration (FHA). They offer lower interest rates than privately insured loans, but often cost more to set up.

HECMs have no specific income limitations, but, lenders will often conduct a financial assessment on potential borrowers before approval. A financial assessment will outline a person’s capability to meet financial obligations.

Remember: Federally insured with few restrictions and low interest.

Proprietary Reverse Mortgage

Proprietary reverse mortgages are private loans. As such, they’re not federally insured. Proprietary reverse mortgages are usually used for larger advances on higher-valued homes. Seniors with a higher appraisal value and a small mortgage may qualify for more funds. They also do not have up-front or monthly premiums. For this reason, lenders may charge a higher interest rate or lend less. Similar to HECMs, a proprietary reverse mortgage has no restrictions for use.

Remember: Privately insured, with higher interest rates and no restrictions.

Single-Purpose Reverse Mortgage

A single-purpose reverse mortgage can be a great option for those not looking to spend as much in the long run. Single-purpose reverse mortgages are offered by state, local, and nonprofit agencies. As the name suggests, it can only be used for one purpose. And, that purpose is usually specified by the lender.

Like other reverse mortgages, a single-purpose doesn’t have to be repaid until the homeowner passes away or sells. However, keep in mind that if a homeowner fails to maintain insurance, the loan could become due early.

Remember: Cheap, but limited use.

When Considering a Reverse Mortgage…

Each type of loan has different characteristics to fit different needs. Shop around with different lenders and make sure to consult with a financial advisor before making your decision. And, don’t forget, always involve a family member in the planning process, if possible.

Posted by Jaxon Kim Mar 22, 2022 Posted in Personal Finance

Published by Jaxon Kim

Jaxon served as an editorial intern with Eagle Financial Publications, writing for www.stockinvestor.com and www.dividendinvestor.com. View more posts

Post navigation

Previous Post Previous post:
6 Facts For Seniors To Consider Before Buying a Manufactured Home
Next Post Next post:
Financing Prefabricated Homes: 5 Loan Types To Know For Buying Manufactured, Mobile, & Modular

Recent Medicare Articles

  • Cigna Medicare Advantage Options
  • A Simple Guide to Determining Your Medicare Eligibility
  • Medicare Plans: How To Know Which Plan Works For You
  • Does Medicare Pay for Eye Exams And Glasses?
  • Everything You Need To Know About Medicare Part C
  • Understanding Your Options For Medicare Coverage

Senior Living & Senior Housing in Popular Cities

New York, New York
Los Angeles, California
Chicago, Illinois
Houston, Texas
Phoenix, Arizona
Philadelphia, Pennsylvania
San Antonio, Texas
San Diego, California
Dallas, Texas
San Jose, California
Austin, Texas
Jacksonville, Florida
Fort Worth, Texas
Columbus, Ohio
Indianapolis, Indiana
Charlotte, North Carolina
San Francisco, California
Seattle, Washington
Denver, Colorado
Washington, District of Columbia
Nashville, Tennessee
Oklahoma City, Oklahoma
El Paso, Texas
Boston, Massachusetts
Portland, Oregon
Las Vegas, Nevada
Detroit, Michigan
Memphis, Tennessee
Louisville, Kentucky
Baltimore, Maryland

Senior Resources by State

Use the list below to find senior information specific to your state.

We also have information for US Territories and some of Canada.

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas
Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina
North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming


The place for Seniors on the WEB

Your resource and advocate in areas of importance to the senior community.

We strive for continuous improvement in our mission and always welcome your input.

Contact Us
Feedback on our website? Please let us know.
Information
  • Housing
  • Age In Place
  • Medicare
  • Home Care
  • Elder Law
Fun / Popular
  • Jokes
  • Puns
  • Attitude
  • E-zines
  • Personal Finance
Other
  • Home Page
  • About Us
  • Privacy Policy
  • Advertising
  • Contact Us
Our resources for seniors include a complete directory of senior housing choices such as apartments, assisted living facilities, cohousing, modular homes, nursing homes and retirement communities; information on aging in place, home care and independent living; articles on elder law, estate planning and a directory of estate planning attorneys; information on Social Security and Medicare; and finally a variety of resources on senior health and wellness.
SeniorResource.com makes no endorsement or guarantees for specific facilities or services or products found on or linked to this site, although our information strives for accuracy, integrity, and the latest industry trends. Listings, advertisements, and links are meant to be informational and are not an offer, including in states where prior registration is required. Void where prohibited by law.

Terms of Use | Privacy Policy | California – Do not sell my personal information | California – CCPA Notice

© 1996- SeniorResource.com. Born in Irvine, CA, serving the nation. All Rights Reserved.

Thank you! Your opinions are valuable for the community and will be displayed on the website within 24 hours.

Rate this item

 

 

   

Leave a comment

Thank you! Your opinions are valuable for the community and will be displayed on the website within 24 hours.

 

Does this listing need to be updated?

Thank you for helping to ensure the accuracy of this listing!