How many reverse mortgages or reverse mortgage products are available? And what are the differences between them?


There are three different reverse mortgages available on the market today:

  1. Fixed Rate Home Equity Conversion Mortgage:

    Lock in an interest rate for the entire life of your loan and take 100% of your funds at closing with a fixed-rate Home Equity Conversion Mortgage (HECM). On fixed reverse mortgages the lowest rate you could get on the market today is at 5.56%. With this government-insured loan, you will always know exactly how much interest is accruing on your reverse mortgage- and eliminate any worry that the rate may increase. On the fixed rate you are required to draw the whole lump sum of money that you qualify for. Other reverse mortgages do not require you to take a full draw.

  2. Adjustable-Rate Home Equity Conversion Mortgage

    The adjustable-rate Home Equity Conversion Mortgage (HECM) is also government insured- but may provide you with greater flexibility, because it generally provides more options for you to receive your proceeds on reverse mortgages (e.g., as a line of credit, monthly payment, lump sum, or a combination of these). The adjustable-rate reverse mortgages may be offered at lower interest rates, but do adjust based on either the Libor or CMT index.

  3. Home Equity conversion for Purchase

    A Home Equity Conversion Mortgage (HECM) for Purchase helps you purchase a home by using a reverse mortgage. It’s applicable for the purchase of a one-to four-family dwelling unit, to be occupied as a principal residence only. It could help you move to a home that will better fit your future needs. Reverse mortgages are becoming very popular for home purchases today.

There is also an option to refinance reverse mortgages.


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