There are three different types of reverse mortgages available in the USA.
• Single Purpose
• Federally Insured
• Proprietary
Single Purpose
This type of mortgage is offered by a state, local government agencies and non profitable organisations. A single purpose reverse mortgage has low costs but are not available everywhere. They are mainly used by people with low or average income and can be used to pay for property upkeep, maintenance or taxes.
Federally Insured
Otherwise known as ‘Home Equity Conversion Mortgages’, a federally insured mortgage is backed by the department of housing and urban development. This type of mortgage is more expensive than that of a single purpose but can be used for any purpose. The initial costs can be relatively high but are available all over.
Proprietary Reverse
These are private loans, which are backed by the companies that develop them. Like with a federally insured mortgage, a proprietary reverse mortgage can be quite costly.
The amount of money you can borrow with these types of mortgages depends on your individual circumstances such as the type of mortgage you choose, value of the property, current interest rate and your age. You can select a credit option, which allows you to use the loan at any time. It is also possible to have a combination of monthly payments with this credit option.
