The most commonly used type of reverse mortgage is known as a?

The most commonly used type of reverse mortgage is the Home Equity Conversion Mortgage (HECM). This particular type of reverse mortgage is insured by the Federal Housing Administration (FHA) and is designed to help older homeowners convert part of their home equity into cash while still allowing them to live in their homes.

HECMs are popular because they come with specific consumer protections and are subject to government regulations, making them more accessible and secure for seniors. Borrowers must be at least 62 years old, and the amount they can receive depends on their age, the interest rate, and the home's value. Importantly, HECMs do not require monthly mortgage payments, which can provide significant financial relief to retirees.

In contrast, proprietary loans are private loans that can be offered by any lender and often do not carry the same protections or adhere to the same strict guidelines as HECMs. Single purpose loans are typically offered by state or local government agencies and may limit how the loan proceeds can be used, making them less flexible than HECMs. Interest-only loans, while a type of mortgage, do not fall under the definition of a reverse mortgage because these loans require payments to be made regularly, rather than allowing the homeowner to access equity without monthly payments