According to the Federal Trade Commission, Home Equity Conversion Mortgages (HECMs) are more expensive than traditional home loans, but they do offer distinct advantages. First of all, they are backed by the U.S. Department of Housing and Urban Development (HUD). Also, HECM loans are offered in a wide variety of places unlike single-purpose reverse mortgages, they do not have income or medical requirements, and the money from them has no strings attached – it can be used for anything, also unlike a single-purpose reverse mortgage.
In addition, according to the Federal Trade Commission, the amount of money you can borrow from a lender with a HECM depends on several factors. The older you are, the unique type of reverse mortgage you select, the value of your home determined by an appraiser, and the current interest rates are determine the amount you can borrow from a lender. Generally, the older you are, the more equity you have and the less you owe on your home, the more money you can get from a HECM.
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