You must be at least 62 years of age to qualify for a reverse mortgage loan.

The most common reverse mortgage is the home equity conversion mortgage (HECM). Since HECM loans are federally insured HECMs have the lowest rates. The rates for this HUD approved loan are adjustable on a monthly or yearly basis, and are set by Fannie Mae. As long as the economy is fairly stable the month-to-month rates will be 1.6% less than the rates charged for the annually adjustable reverse mortgage loans.

Be aware that appraisal fees, origination fees, mortgage insurance, monthly servicing fees, and closing costs eat away at the principal of your home. The loan origination fees are limited to a maximum of 1.5% of the loan’s limit.

Proprietary home loans may allow you to tap more short term cashflow from your home, but eat away at home equity quicker – through higher interest rates and closing costs.