Reverse mortgage helps elderly citizens who are more than 62 years of age to utilize their home equity to enhance their present earnings. Reverse mortgage is basically a loan or advance offered to homeowners which does not require any repayment except in the event of the death of the homeowner, relocation of the homeowner or selling of the home.

In the United Kingdom, reverse mortgage is popularly known as lifetime mortgage. Therefore, the homeowner does not have the necessity to repay the loan provided that he stays in the home. The reverse mortgage loan providers dispense the cash in the form of regular payment, lump sum payment, line of credit or combinations of these.

In the U.S., reverse mortgage loans are available in three basic forms; federally insured reverse mortgage, single purpose reverse mortgage and proprietary reverse mortgage. There can be other forms of reverse mortgage in various countries, nevertheless, the principal concept is quite familiar.

Single purpose reverse mortgage

Single purpose reverse mortgage loan is provided by non-profit seeking entities and government agencies. This loan is usually inexpensive. Though the government agencies might be state or local, the availability of this mortgage is limited to only some locations. This type of reverse mortgage is utilized for particular purposes like home improvement, home renovation, as well as property tax payment. Homeowners whose income ranges from low to moderate can avail this loan.

Proprietary reverse mortgage

Proprietary reverse mortgage is possessed or guaranteed by the private corporations. It is typically the costliest among all reverse mortgages. Nonetheless, the homeowner can receive higher amount in comparison to other forms of reverse mortgage. Usually, this loan functions in the same manner like the Federally Insured Reverse Mortgage.

Federally Insured Reverse Mortgage

Federally Insured Reverse Mortgage is guaranteed by the Department of Housing and Urban Development or HUD in the U.S. This loan is more frequently termed as home equity conversion mortgage or HECM. If the homeowner lives in the house for a brief time period, then the upfront costs become too expensive. Thus, a Federally Insured Reverse Mortgage is more expensive than a single purpose reverse mortgage.

This loan is completely different in nature from the single purpose reverse mortgage. You can utilize this mortgage for a number of purposes and there are no medical or income criteria.

Federally Insured Reverse Mortgage loan is easily available at any location of the country.

Useful sites:

Reverse Mortgage – Visit Reverse Mortgage Guides for educational information about the pros and cons of reverse mortgages, news, and tools including a reverse mortgage calculator.

Reverse Mortgage Explained – For reverse mortgage related information visit this site.