Some folks will use it to pay for costs, trips, house renovations or even to pay off the remaining 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 don't desire you to default on your home mortgage, so since of that, you won't certify for a reverse home loan if your home deserves more than a certain quantity.1 And if you do get approved for an HECM, you'll pay a substantial home loan insurance premium that secures the lender (not you) against any losses - what is the interest rate today for mortgages.They're provided from independently owned or operated companies. And since they're not controlled or guaranteed by the federal government, they can draw homeowners in with guarantees of higher loan amountsbut with the catch of much greater rate of interest than those federally guaranteed reverse mortgages. They'll even offer reverse home mortgages that allow homeowners to obtain more of their equity or consist of homes that surpass the federal optimum amount.