Some folks will utilize it to pay for bills, getaways, home restorations and even to pay off the staying amount on their regular mortgagewhich is nuts! And the repercussions can be big. HECM loans are kept on a tight leash by the Federal Real Estate Administration (FHA.) They do not want you to default on your home mortgage, so because of that, you will not certify for a reverse mortgage if your house deserves more than a certain amount.1 And if you do receive an HECM, you'll pay a large home mortgage insurance premium that secures the lender (not you) versus any losses - which of the following statements is true regarding home mortgages?.They're provided from independently owned or run business. And due to the fact that they're not regulated or guaranteed by the government, they can draw house owners in with guarantees of higher loan amountsbut with the catch of much greater rate of interest than those federally guaranteed reverse home mortgages. They'll even offer reverse home loans that enable property owners to borrow more of their equity or consist of homes that exceed the federal optimum quantity.