Some folks will use it to pay for costs, vacations, house restorations or even to pay off the staying amount on their routine mortgagewhich is nuts! And the effects can be big. HECM loans are continued a tight leash by the Federal Housing Administration (FHA.) They do not want you to default on your home mortgage, so due to the fact that of that, you will not receive a reverse home mortgage if your home is worth more than a specific quantity.1 And if you do certify for an HECM, you'll pay a hefty home mortgage insurance premium that protects the lender (not you) against any losses - what is the current interest rate for mortgages?.They're provided from independently owned or operated business. And since they're not managed or guaranteed by the government, they can draw house owners in with guarantees of greater loan amountsbut with the catch of much greater interest rates than those federally guaranteed reverse home mortgages. They'll even provide reverse home loans that enable property owners to borrow more of their equity or consist of houses that exceed the federal optimum amount.