Some folks will utilize it to spend for costs, getaways, house restorations and even to pay off the staying amount on their routine mortgagewhich is nuts! And the repercussions can be huge. HECM loans are continued a tight leash by the Federal Real Estate Administration (FHA.) They don't desire you to default on your home loan, so since of that, you will not receive a reverse home mortgage if your home is worth more than a specific amount.1 And if you do receive an HECM, you'll pay a hefty home loan insurance premium that safeguards the lender (not you) versus any losses - which of the following statements is not true about mortgages?.They're provided from independently owned or operated companies. And because they're not regulated or guaranteed by the federal government, they can draw house owners in with guarantees of higher loan amountsbut with the catch of much greater rates of interest than those federally guaranteed reverse mortgages. They'll even use reverse mortgages that permit house owners to borrow more of their equity or consist of homes that surpass the federal optimum amount.