- a line of credit
- fixed monthly payments
- combination of both options
While they are widely available, HECMs are offered solely through FHA-approved mortgage lenders.
2. Proprietary reverse mortgage
This type of reverse mortgage is not federally insured. If your clients’ property has high value, they can get a bigger loan advance from a proprietary reverse mortgage.
3. Single-purpose reverse mortgage
This type of reverse mortgage is less common than the previous two mentioned. It is offered by local and state government agencies and non-profit organizations. However, it is also the least expensive.
The catch is that your clients can only use a single-purpose reverse mortgage to cover one specific expense. For instance, it can only be used for home renovation or repairs, property taxes, and other purposes specified by the mortgage lender.
Whether your clients choose an HECM, a proprietary reverse mortgage, or a single-purpose reverse mortgage will depend on their financial situation.