Reverse mortgages are generally the least expensive option, but availability is limited. Reverse mortgage interest rates are quite low, currently around 2% for a variable rate and around 5% for a fixed rate. Even if you don't have heirs to leave the house to, you may need it later to help pay for assisted living or extended home health care. The amount you can borrow depends on a variety of factors, including current interest rates, your home's appraisal, your age (you must be at least 62 to qualify for a reverse mortgage), and your credit score. . If the amount you owe on the reverse mortgage exceeds the value of your home, the FHA will cover most or all of the loss. If you still have money left on your mortgage, the new loan can be used to pay off the remaining balance. “The main cost difference between lenders will be origination fees,” says Maningas. And you can't take out another home equity loan once you have a reverse mortgage. “Cost is one thing, but you have to take into account the expertise and professionalism of the person you are dealing with. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay With a single-purpose reverse mortgage, the lender restricts how you can use the money from a reverse mortgage. These loans are insured by the United States. It's important to understand how reverse mortgages work before you sign up, as some types of reverse mortgages have drawbacks. For example, a single-purpose reverse mortgage can only be used to pay property taxes or make home repairs. If you own your home and are 62 or older, a reverse mortgage could allow you to access the equity in your home without selling or moving. When you compare, it warns against automatically choosing the least expensive lender. The most important thing is that you are spending what is probably your largest asset. They are offered by some state and local governments and nonprofit organizations, and are generally available only to low- or moderate-income borrowers who may not be able to qualify for other types of reverse mortgages. This guide explains the fundamentals of reverse mortgages so you can decide if a reverse mortgage is right for you. Will the lender meet with you in person? Will they advise you personally and tailor the loan to your situation? For such an important decision, it may be worth the investment to get a higher level of service.” You can keep the loan as a lump sum, a monthly amount, or a line of credit (essentially, a checkbook that you use to spend the funds as needed), or a combination of these. You will pay a mortgage insurance premium to cover the possibility of this type of loss, but it can be financed by the cost of your loan. Keep in mind: this is just a sample. Get a personalized document now from our expert writers. Get Custom Essay As helpful as it may sound, reverse mortgages have serious pitfalls, says Sandy Jolley, a reverse mortgage abuse and suitability consultant in Los Angeles. The maximum amount authorized by the government).).