There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages. Each option has different pros and cons that need to be considered when looking into taken out a reverse mortgage.

Single-Purpose Reverse Mortgages A single purpose reverse mortgage is the lowest-cost type of reverse mortgages to obtain, but as the name indicates it can only be used for one specified purpose. They are typically offered by state or local government agencies. These loans a great for individuals who need cash for a specific purpose like paying property taxes or fixing up there homes. Here are descriptions for several different types of single purpose reverse mortgages:

Property tax deferral (PTD) mortgages are reverse mortgages that provide loan advances for paying property taxes. Deferred payment loans (DPLs) are reverse mortgages providing lump sum disbursements for repairing or improving homes. Federally Insured Reverse Mortgages A federally insured reverse mortgage is the only reverse mortgage insured by the Federal Housing Administration (FHA). These reverse mortgage are one of the lowest-cost multipurpose reverse mortgages currently available. Overall they typically provide the largest total cash benefits of all the reverse mortgage options. The proceeds from a federally insured reverse mortgage can be used for any purpose. These loans are also known as Home Equity Conversion Mortgages (HECMs).

This way you pay off your mortgage as soon as possible. Sound good to me,right?Well,much to my suprise,this company claims that is exactly what we should NOT be doing!On the contrary,their idea is one which is echoed by New York Times Best Selling author of “The New Rules Of Money”,Rick Edelman,who says,”You should get a big,30 year mortgage and never pay it off.”Edelman and GEL put rules forth which read like this: 1.Never send extra money to your mortgage 2.Stay away from bi-weekly plans. 3.Make the smallest payment with the biggest tax break. 4.Putting extra money toward your mortgage is like putting it under the matress. To back up his claim,Edelman offers five distinct reasons why you should carry a long loan: 1.Mortgages don’t lower your homes value.Your home will grow in value whether or not you Proprietary Reverse Mortgages A proprietary reverse mortgage is a mortgage product owned by a private company. These type of loans are more expensive then the other reverse mortgage types and should be approached with caution. Anyone looking into these type loans should get a comparison with a similiar HECM. One benefit of proprietary reverse mortgages are the higher home value limits. So, if you live in a home that is worth a lot more than the average home value in your county, a proprietary loan may give you greater loan advances than a Home Equity Conversion Mortgage (HECM). As with any financial decision, you should get professional help to help you decide which option is best for your situation. Reverse mortgage counselors can help you evaluate each of your options and help you make an informed decision.

About The Author
Charles Kirkendall writes about reverse mortgages and other senior financial issues. Visit http://www.reverse.settle-today.com or http://reverseannuity.blogspot.com for more information and resources.

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