The world of finances, home loans and mortgages can be tough to navigate. Often times, it is easy to get swept away in a bunch of technical jargon – interest rates, monthly fees, repayment plans – that come standard with many of these options. When it comes to reverse mortgages, finding the right one doesn’t have to be difficult. Here is some basic information pertaining to three types of reverse mortgages that will help you select the best one for your financial needs.
HECM Reverse Mortgage
If you are an older adult, reverse mortgage companies will work with you to take advantage of this unique type of loan. HECM stands for “Home Equity Conversion Mortgage” and is a program of the Federal Housing Authority. This particular mortgage was originally designed with older adults in mind – giving them both peace of mind and sustained long-term financial security. The program allows elderly residents to purchase a new home and obtain a reverse mortgage all at the same time – allowing them to relocate more easily to be closer to friends and family members, or downsize their homes to better cater to their physical needs. HECM mortgages are available in either fixed rate or adjustable rate options – meaning that the interest rates are either locked or variable, depending on personal preference and financial needs.
HomeSafe Proprietary Reverse Mortgages
Another type of loan that reverse mortgage companies can help you sign up for is the HomeSafe Proprietary reverse mortgage. Similar to the HECM loan, this loan provides an alternative for those who have higher value homes – homes that exceed the Federal Housing Authority’s lending limit. This reverse mortgage does not have a required premium and comes with a fixed rate – presenting homeowners with a rather significant cost savings. This type of mortgage also covers condominiums valued at over $500,000. This is especially helpful for those who currently live in – or want to move into – a condominium association or older adult community.
For Purchase Home Equity Conversion Mortgage
The “For Purchase Home Equity Conversion Mortgage” is yet another type of mortgage that is available to homeowners. This mortgage helps individuals purchase a home with a reverse mortgage. This option is unique in the fact that it allows for homeowners to purchase a new home using funds from the sale of their old property, combined with the mortgage terms. A For Purchase Home Equity Conversion Mortgage is appealing, as it leaves homeowners with no monthly mortgage payment or financial strain.
