While reverse mortgages in KC can serve many purposes—from paying for health insurance to home improvements—many people use them to prevent foreclosure of a primary residence. When reducing your mortgage rate is not an option, you can attain temporary financial relief through a reverse mortgage. Reverse mortgages may be obtained if you are over 62 years old and have the right amount of home equity in your primary residence.
Even though all reverse mortgages have some benefits and disadvantages in common, you have several options depending on your income, the amount of money you need, and the purpose you need it for. There are three types of reverse mortgages in KC available to seniors, including:
Single-Purpose Reverse Mortgages
The distinguishing feature of a single-purpose reverse mortgages is that they must be used for one specific purpose, which is outlined in the loan’s documentation. Single-purpose reverse mortgages in KC are typically only given to people with low to moderate incomes. As a result, these mortgages are usually low-cost and are provided by a:
- State or local government entity
- Non-profit organization
Federally-Insured Reverse Mortgages
Commonly referred to as “HECM’s” (home equity conversion mortgages), federally-insured reverse mortgages in KC make up the majority of reverse mortgages in the country. These loans are provided by the U.S Department of Housing and Urban Development (HUD). These are the most accessible reverse mortgages available to seniors today because they do not have any income or medical requirements.
Proprietary Reverse Mortgages
Proprietary reverse mortgages in KC are loans backed by a private lender. Over the past few years, proprietary reverse mortgages have become more common as federally-insured reverse mortgages have gained more principal limitations. Therefore, if you want to pursue a jumbo reverse mortgage, proprietary loans may be your only option.