60-Second Guide to Reverse Mortgage Programs

There are a variety of reverse mortgage programs available to seniors. However, not all reverse mortgages are created equal. Use this 60-second guide to the types of reverse mortgage programs out there so you’ll know what to expect from different lenders.

Home Equity Conversion Mortgage
The HECM program is the only reverse mortgage that is insured by the Federal Housing Administration (FHA). This is the most popular reverse mortgage program in the U.S. Features of the HECM program include:
—Counseling is required

—FHA sets local lending limits

—Lending guidelines are more strict than other reverse mortgage programs.

Conventional Reverse Mortgage Loans
Conventional or proprietary mortgages are the most expensive kind of reverse home loans and will be tougher to qualify for. These jumbo loans are owned or backed by private companies. Homeowners who can qualify may get more cash than with an HECM. Other features include:
—Mortgages are not government insured

—Counseling may not be required

—Homes worth more than the Housing and Urban Development (HUD) limits could qualify

—Proprietary reverse mortgages may not be offered in all states.

State and Local Government Reverse Mortgages
Some states and local governments offer reverse mortgages to residents. These programs may have lower loan amounts than other reverse mortgage loans. Features of some of the programs may include:
—Restrictions on what the proceeds from the loan can be used for

—Limits on how much income homeowners can have

—Lower fees than other reverse mortgage programs

It’s important to investigate the various reverse mortgage programs available to you to find the best deal. Compare quotes from several mortgage lenders here. You’ll find that interest rates, fees, payment schedules, and other features will differ from program to program.

This entry was posted on Thursday, July 23rd, 2009 at 1:00 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.