Reverse Mortgage Lenders Classifications

There are several types of reverse mortgage lenders. They can be Government agencies, non-profit organizations or private companies. Any senior over the age of 62 qualifies for a reverse mortgage as long as they have plenty of equity in their homes and they live in the property.

Government agencies (local and state) and non-for-profit organizations provide single-purpose funding. These loans are low cost but they have a lot of requirements to qualify. Some of the requirements may be economical and medical. In addition, you are limited on how you can spend the money.

Then, there are large private corporations that are approved by HUD to offer the federally insured Home Equity Conversion Mortgage (HECM.) Because the mortgage is insured by the Federal Government, the cost of the loan is usually very low. In addition, it’s easier to apply for this type of loan and you can use the money for whatever you want.

The final type of reverse mortgage lenders is the private corporation that hasn’t been sanctioned by the HUD. Because they are not insured by the HUD, these companies need to charge more money for this program and are therefore the most expensive.

Of course, because HUD approved reverse mortgage lenders are insured by the Federal Government, they are the best type available. With a HECM lender, you will be able to save thousands of dollars over the life of the loan and avoid possible scams because they are carefully monitored by the HUD.

Reverse Mortgage Lender