In the latest reverse mortgage coverage published in the Huffington Post, an article originally posted by NowItCounts.com covers the three “types” of reverse mortgages.
We thought they might mean fixed rate, or full-draw, or reverse mortgage for purchase, but the article actually delves into the Federal Housing Administration insured Home Equity Conversion Mortgage (HECM); a “reverse annuity with HECM;” and the option to borrow with a lender offering a private reverse mortgage. Currently, Urban Financial of America is the only lender offering a non-HECM private reverse mortgage.
Among the benefits of the HECM, the article notes, relative to alternatives: “…it often comes with lower rates and lesser fees than those that would be offered by private lenders. In addition, the FHA backs these loans, making them a more lucrative option for the banks that issue them.”
And for specifics private reverse mortgages, the Huffington Post reports, “…these types of mortgages are typically based upon income and credit score as well as existing home equity, since they are privately backed, and can often come with higher interest rates and more fees because they are offered by private lenders.”
Ultimately, the article advises researching all of the options before making a reverse mortgage decision.
Written by Elizabeth Ecker