Types Of Reverse Mortgages

Standard Home Equity Conversion Mortgages (HECM)

This is the most popular among the different types of reverse mortgages. A HECM is a federally-insured reverse mortgage backed by the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA). Borrowers above 62 years old can access a loan of up to $625,500 matched to the home equity possessed by the borrower and the value of the property. This can be either a variable rate or a fixed rate loan.

HECM for Purchase

This is among the most popular types of reverse mortgages for seniors looking to “downsize” to a more manageable property while eliminating mortgage payments. This is similar to an ordinary HECM, but the proceeds of the loan are used to purchase a new property. Unlike conventional financing, the homeowner only needs to pay closing costs once.

Reverse Mortgage Refinance

These types of reverse mortgages were primarily designed for homeowners above 62 years old who already have a reverse mortgage but want to take advantage of lower interest rates or who want to take advantage of an increase in the value of the home equity since the time when the reverse mortgage was initially taken out. It can also be used to add a new co-owner to the home such as a spouse.

Single-Purpose Reverse Mortgages

Among the different types of reverse mortgages, this “jumbo” reverse mortgage was designed for seniors who possess homes that exceed the $765,600 limit of conventional reverse mortgages.

These differ from other types of reverse mortgages in that they are not insured any Federal institution but by an independent company. It also differs from other types of reverse mortgages in that the funds are only available in a lump sum when the loan closes. Interest rates are usually higher than other types (because they are not insured), but there are no insurance premiums to pay and the fees associated with it are relatively lower.

Learn More About the Types of Reverse Mortgages

If you need help weighing the pros and cons of the different types of reverse mortgages, a friendly representative from Citizens Lending Group is here to guide you. Call us at (800) 480-6828 or use our convenient online contact form to learn more about the reverse mortgage requirements and if a reverse mortgage is right for you.