Some folks will use it to pay for bills, trips, house restorations or perhaps to pay off the remaining quantity on their regular mortgagewhich is nuts! And the repercussions can be substantial. HECM loans are kept a tight leash by the Federal Housing Administration (FHA.) They do not want you to default on your home mortgage, so since of that, you will not get approved for a reverse home loan if your home deserves more than a specific amount.1 And if you do get approved for an HECM, you'll pay a hefty home mortgage insurance premium that protects the lender (not you) versus any losses - when did 30 year mortgages start.They're provided from privately owned or run business. And due to the fact that they're not regulated or insured by the federal government, they can draw homeowners in with pledges of higher loan amountsbut with the catch of much higher rates of interest than those federally insured reverse home mortgages. They'll even provide reverse home mortgages that permit house owners to obtain more of their equity or consist of houses that exceed the federal maximum quantity.