Some folks will utilize it to spend for costs, getaways, house renovations or even to pay off the staying amount on their regular mortgagewhich is nuts! And the repercussions can be big. HECM loans are kept a tight leash by the Federal Housing Administration (FHA.) They do not want you to default on your home mortgage, so since of that, you will not certify for a reverse home mortgage if your home is worth more than a specific amount.1 And if you do qualify for an HECM, you'll pay a large mortgage insurance premium that secures the loan provider (not you) against any losses - which of the following statements is not true about mortgages.They're provided from independently owned or run companies. And because they're not controlled or guaranteed by the government, they can draw house owners in with pledges of higher loan amountsbut with the catch of much greater rate of interest than those federally guaranteed reverse mortgages. They'll even offer reverse mortgages that allow property owners to borrow more of their equity or consist of homes that surpass the federal maximum amount.