What does it cost? The costs associated with this type of mortgage can be high. The interest rate is higher than what you would be charged for a traditional mortgage or home equity line of credit (HELOC). Rates for those credit products have hovered near historic lows for a number of years.

What is the least expensive reverse mortgage?

single-purpose reverse
A single-purpose reverse mortgage is offered by state, local, and nonprofit agencies; it is the least expensive process option for a reverse mortgage loan. Home equity conversion mortgages (HECM) are federally-insured reverse mortgages backed by the U.S. Department of Housing and Urban Development.

What does a reverse mortgage do to Your House?

A reverse mortgage or “home equity release” lets you borrow funds using your home as security. This means you can free up part of the value of your house without having to sell it.

Which is the most common type of reverse mortgage?

The most common is the home equity conversion mortgage or HECM. The HECM represents almost all of the reverse mortgages lenders offer on home values below $765,600 and is the type you’re most likely to get, so that’s the type this article will discuss.

Where can I get counseling for a reverse mortgage?

You can visit HUD for a list of counselors, or call the agency at 1-800-569-4287. Counseling agencies usually charge a fee for their services, often around $125. This fee can be paid from the loan proceeds, and you cannot be turned away if you can’t afford the fee.

Why are reverse mortgages so popular in New Zealand?

Some people borrow because they want to stay in their existing home, with family and friends nearby. But they need a little more money to make life comfortable. A report on the New Zealand reverse mortgage market by Deloitte Australia found that debt repayment was the most common use for the money, up from 14% in 2012 to 22% in 2013.