Single-Purpose Reverse Mortgages
August 28th, 2009
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News reports often focus on the Home Equity Conversion Mortgage (HECM), a reverse home loan offered only through FHA-approved mortgage lenders. But even though the HECM is the most popular reverse mortgage program in the U.S., there are other loan programs available to seniors over 62. One such loan is the single-purpose reverse mortgage.
Check with Local Agencies
Single-purpose reverse mortgages are usually offered by state or local government agencies and nonprofits. They allow homeowners in certain locations to convert home equity to cash. However, these loans usually have restrictions on how the money can be spent. Some common approved uses of the money include home repairs and improvements or paying property taxes.
Who Can Get These Loans?
Single-purpose reverse mortgages also may have low costs. But generally, this type of mortgage is only available for people with low to moderate incomes. Check with the closest Area Agencies on Aging office to find reverse loan programs for which you might qualify.
Get Reverse Mortgage Counseling
You don’t have to decipher the ins and outs of reverse mortgages on your own. Reverse mortgage counseling can help as you explore whether to tap the equity in your home. A reverse mortgage counselor can go over your income and expenses to see how a reverse mortgage would impact your finances. A counselor can also help you learn about the different types of reverse mortgages available.
Get Reverse Mortgage Quotes
Don’t limit yourself to only exploring single-purpose reverse mortgages. Find out how HECM reverse mortgages stack up. And even though proprietary reverse mortgages, which are private loans, usually have higher costs, it’s worth it to investigate them, too. Compare several reverse mortgage quotes with no obligation.