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"What kind of a Florida reverse mortgage should I get?" is the biggest question asked after the decision to actually get a reverse mortgage has been made. Before you start talking with a lender do some research on the three types of Florida reverse mortgage available.
These are the three options available:
- Home Equity Conversion Mortgage (HECM) — FHA insured
- Lender insured loans
- uninsured loans
The loans have some commonalities: they all have closing costs and origination fees, and some lenders apply some service charges and administration costs that will be disclosed prior to signing.
HECM loans are the loans most people prefer. They have the backing of the Federal Housing Authority, so there are some federal safeguards there for you. The lender has to follow all the federal guidelines with the loan, the lenders themselves have to meet certain minimum standards, and lenders like dealing with these loans because they are guaranteed by the federal government.
If you take out a privately insured Florida reverse mortgage, there is a premium charge applied to the loan costs for the insurance. Like the other loans, all these loans are applied as part of your loan amount so you are not out of pocket when you obtain a Florida reverse mortgage. That's an advantage that's also a disadvantage of sorts: the loan has an immediate reduction in the equity to pay for the loan costs and interest.
There is the uninsured variety of reverse mortgages but those loans are good for special circumstances. You should talk to your loan counselor if you want to learn more about this loan or all the Florida reverse mortgage types presented here.
No matter which Florida reverse mortgage you choose to employ as your financial tool, you should approach each option fully informed.
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