Types of Reverse Mortgages

There are several types of reverse mortgages. Some are more expensive than others. Types of reverse mortgages include:

Reverse mortgages are offered by state and local governments (often called "single purpose reverse mortgage"). These are generally the least expensive reverse mortgages. These can be the most restrictive in how the money received can be used.

Federally insured Home Equity Conversion Mortgage (HECM). They are almost always less expensive than other private sector reverse mortgages, but more expensive than reverse mortgages to state and local governments.

Other private sector (owners) of reverse mortgages.

Alternatives to Reverse Mortgages

Often an option that causes a negative emotional reaction that the sale of a home is an alternative to a reverse mortgage. The proceeds can be used either to rent or buy a smaller, more "elder friendly" houses, while the remaining money can be invested to generate additional income. This possibility should at least be considered and compared with a reverse mortgage so that a person makes a decision.