The Pros and Cons of a Proprietary Reverse Mortgage

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A proprietary reverse mortgage is a mortgage solution that presents an alternative to the traditional home-equity conversion mortgage (HECM) that is offered by the FHA. This type of mortgage carries with it some advantages and disadvantages. Here are some of the pros and cons of a proprietary reverse mortgage.


One of the biggest advantages of this type of reverse mortgage is that you can get financing for a large property. Many of the other reverse mortgages on the market have small loan amounts that eliminate homeowners with larger homes from consideration. This type of loan is also known as a jumbo loan program.

Another advantage of this type of loan is that you can create a regular source of income for yourself. Many people in retirement do not have enough money coming in to support their lifestyles. With this option, you can avoid that problem.


One of the major disadvantages of a proprietary reverse mortgage is that you will most likely pay a higher interest rate than you would with other reverse mortgages. The interest rates on larger loans like this tend to be a little bit higher for borrowers. This means that you will have to eat into more of your equity with the interest.