Wondering how many types of reverse mortgages there are? You’ve come to the right place. In this blog, we’re going to take a look at the 3 types of reverse mortgages and talk about which one may be best for you. Keep on reading to learn more about reverse mortgages.
Single-purpose reverse mortgages are the least expensive option. This type of reverse mortgage is offered by non-profit organizations, as well as, both state and local government agencies, but is not available anywhere else.
The name of this type of reverse mortgage is quite literal. You can only use the funds received for this mortgage for one purpose, which is specified by your lending institution. For example, your lender may say your loan is specifically for home repairs, renovations, or property taxes.
A proprietary reverse mortgage is a private loan backed by a company that develops them. With this loan type, you will usually qualify for more funds and get a bigger loan advance. Proprietary reverse mortgages are not backed by the government, so mortgages like these are only attainable by private lenders.
A HECM for Purchase is the best type of reverse mortgage if you’re looking to purchase a new home. This mortgage type will allow you to finance a home and purchase one, with just one transaction, all while never paying monthly payments.
While you’re wondering what the 3 types of reverse mortgages are, you’re probably thinking about how much you can borrow. The exact amount you can borrow depends on the following factors:
Now that you know the different types of reverse mortgages and what they are, let’s talk about which one will work best for you.
Regardless of the types of reverse mortgage you choose, it’s important to ensure you understand all fees, costs, and the process of loan repayment.