Some folks will utilize it to pay for expenses, getaways, home restorations or perhaps to pay off the remaining amount on their routine mortgagewhich is nuts! And the effects can be big. HECM loans are continued a tight leash by the Federal Real Estate Administration (FHA.) They don't want you to default on your home mortgage, so because of that, you will not qualify for a reverse home mortgage if your house is worth more than a particular amount.1 And if you do receive an HECM, you'll pay a hefty mortgage insurance premium that protects the loan provider (not you) versus any losses - what is the interest rates on mortgages.They're provided from independently owned or run companies. And since they're not regulated or insured by the government, they can draw property owners in with promises of greater loan amountsbut with the catch of much greater rates of interest than those federally guaranteed reverse mortgages. They'll even offer reverse home mortgages that enable house owners to obtain more of their equity or consist of homes that go beyond the federal maximum amount.