There are three types of reverse mortgages: the Single-Purpose Reverse Mortgage, the Federally-Insured Home Equity Conversion Mortgage (HECM), and the Proprietary Reverse Mortgage.



The Single-Purpose Reverse Mortgage is often provided by non-profit organisations and local government entities and is designed for particular needs like house repairs or property taxes. The most typical kind of reverse mortgage is the Federally-Insured Home Equity Conversion Mortgage (HECM), which is protected by the Federal Housing Administration (FHA). Homeowners are able to access a portion of their home equity and use the money however they see fit. The Proprietary Reverse Mortgage is a private loan that is comparable to the HECM but is not FHA-insured, and it is provided by some banks and other lending organisations. Homeowners who want to borrow more money or whose homes are worth more typically have access to it.


The Home Keeper Reverse Mortgage, an unique product provided by Fannie Mae, is another sort of reverse mortgage. This is a common choice for property owners who don't satisfy the criteria for a HECM, which are based on the value of the home and the borrower's age. Property owners with lesser home values can apply for a Home Keeper Reverse Mortgage, which also enables borrowers to access more of their home equity.


The Single-Disbursement Lump-Sum Reverse Mortgage is another type of reverse mortgage; it is similar to a HECM but the borrower receives a lump sum of cash at the time the loan is issued rather than periodical payments. Those who require a sizable chunk of money for a specific purpose, such as paying off a mortgage or making significant home repairs, may find this option interesting.


The Adjustable Rate Reverse Mortgage (ARM), a different kind of reverse mortgage, enables the borrower to receive payments based on an adjustable interest rate. This implies that over the course of the loan, both the interest rate and the payments may change. Homeowners who are searching for a reverse mortgage with a lower initial interest rate and payments may find this type to be advantageous, but they should be aware that the interest rate and payments may rise over time.


A sort of reverse mortgage known as a Reverse Mortgage for Purchase (RMP) enables borrowers to use the loan proceeds to purchase a new residence. Senior homeowners who want to downsize or relocate but lack the funds to put a down payment on a new property will find this form of reverse mortgage to be especially helpful.


With a reverse mortgage for purchase, the borrower can use the loan proceeds to pay for a new home and extra cash for other obligations. This kind of reverse mortgage can also assist in lowering the amount needed for a down payment on a new property, making it more reasonable for elders to purchase a new home.



In conclusion, Reverse mortgages come in different types and it is important to understand the pros and cons of each type before making a decision, it's also important to consult with a financial advisor or HUD-approved counselor.