Most of the proprietary programs are typically higher in rates, caps, and costs than the FHA/HUD program. The FHA program requires that the borrower attend a counseling and education session at an approved agency to make sure the terms are fully understood. The proprietary programs also offer some counseling, but this is typically performed by an employee of the lender or a loan officer.
Now that said, the proprietary programs may offer the borrower the ability to borrow more of their equity than the FHA program. The FHA/HUD program is limited to the average sales price in your specific county. If you are a homeowner with a greater home value than the average, then the FHA may not be the better program.
Reverse mortgages are quickly becoming one of the most popular financial planning tools for the homeowner over 62 years of age. Many are using the program to eliminate their current mortgage obligation. They are also using it to help offset the increasing cost of living, such as from medical bills, or to fund second or vacation homes.
And finally, there is no personal liability for the repayment of the mortgage balance. The recovery of the reverse mortgage is tied to the value of the real estate mortgage and eventual sale of that property.
Take a hard look at this program, as it is a very nice program for many seniors. Good Luck!
Ron Cahalan can be contacted at roncahalan@mac.com. His press kit can be found at roncahalan.presskit247.com.
