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Retirement can be much more enjoyable with some extra spending cash. Luckily, homeowners over 62 years of age can turn their home equity into cash with a reverse mortgage. A reverse mortgage can be an excellent supplement to social security and withdrawals from savings.

There are three types of reverse mortgages: HECM Traditional, HECM Saver and Proprietary reverse mortgages.  They may have different expenses, requirements & purposes.

HECM Standard reverse mortgages provide you the most cash available, unless you have a high value home (over $500,000 appraised value). HECM Saver offers the lowest closing costs, but also offers you the least amount of cash.  Proprietary reverse mortgages are generally used for higher value homes, homes appraised between $500,000 and $5,000,000.

Federally-insured reverse mortgages are also known as Home Equity Conversion Mortgages (HECM’s). They can be more expensive than traditional home equity loans. This should be considered if you don’t want to borrow much money or if you will not be staying in your home for long. HECM loans do not have income or credit requirements and can be used for any purpose.  With a reverse mortgage, you do not need to have a job. There are no debt to income requirements and your credit history is not a factor.  Neither your credit rating nor your credit history has any bearing on whether or not you are approved or your interest rate.

Proprietary reverse mortgages are private loans that are that are backed by the companies that develop them. With proprietary reverse mortgages, depending on your age, you generally receive more money than the HECM reverse mortgage programs.

Before applying for any reverse mortgage, you must have HUD reverse mortgage counseling.  This can be done either in person or over the phone.

Which Reverse Mortgage is Right for You?

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