Some folks will use it to spend for expenses, trips, house restorations or even to settle the staying quantity on their regular mortgagewhich is nuts! And the consequences can be substantial. 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 since of that, you will not receive a reverse home loan if your home is worth more than a particular amount.1 And if you do receive an HECM, you'll pay a significant home loan insurance coverage premium that secures the loan provider (not you) against any losses - why do mortgage companies sell mortgages.They're provided from independently owned or run companies. And because they're not regulated or insured by the government, they can draw house owners in with pledges of greater loan amountsbut with the catch of much greater rate of interest than those federally insured reverse home loans. They'll even provide reverse home mortgages that allow homeowners to borrow more of their equity or include houses that go beyond the federal optimum quantity.