When You Should Consider Getting a Reverse Mortgage for a Particular Purpose If you have ever seen an advertisement for reverse mortgages, there is a good chance that the product described was a home equity conversion mortgage (HECM). Homeowners who are at least 62 years old are eligible to use these loan products that are insured by the federal government to convert their home equity into cash. This cash can be taken from reverse mortgage lenders and then be used to pay for items such as basic living expenditures, healthcare costs, or to modify their homes. Single-purpose reverse mortgages and proprietary reverse mortgages make up a minor portion of the market for reverse mortgages. Home equity conversion mortgages (HECMs) make up the majority of the market for reverse mortgages. When compared to a home equity conversion mortgage (HECM), a reverse mortgage with a particular purpose may offer more advantages in some circumstances. KEY TAKEAWAYS A person must be at least 62 years old to qualify for a reverse mortgage, which is a sort of loan that enables homeowners to turn a portion of the equity in their house into cash income. Borrowers who opt for a reverse mortgage with a single-use provision are required to put the money they receive toward a predetermined goal that has been sanctioned by the lender. These one-time payments can be put toward a variety of home-related expenses, including property taxes, repairs, and general upkeep and maintenance. Single-purpose reverse mortgages typically have lower costs than other options of a similar nature; however, it may be more difficult to find a lender who is willing to provide these types of loans. What Is a Reverse Mortgage Used for Just One Purpose? Homeowners who are at least 62 years old and have a single-purpose reverse mortgage can access a portion of the equity in their house to pay for a cost that has been approved by the lender. These costs often include property taxes and necessary home repairs. They offer a one-time advance in the form of a lump payment. The vast majority of single-purpose reverse mortgages are issued by government entities on the state and local level as well as nonprofit organisations. Single-purpose home equity conversion mortgages (HECMs), much like traditional HECMs, are not structured as instalment loans that are repaid through regular monthly instalments. Instead, the entire amount of the loan is payable when the property is sold, when the borrower relocates to a new principal residence (including an assisted care facility), or when the borrower passes away. In addition, repayment can become necessary if you stop paying your homeowner's insurance premiums, if your house falls into disrepair, or if the local government decides to condemn it. https://standardlenders.com/reverse-mortgage-loan-product/