A type of reserve mortgage loan that provides a larger loan amount to the borrower, however, this is a private loan, not federally insured, and not as tightly regulated as HECM.
A proprietary loan allows the senior homeowner to access the equity of their home through a private lender.
While you’re torn between these two options, they have huge differences where they can help you in making a decision. HECM allows the homeowners to borrow part of their home’s equity as well as a proprietary reverse mortgage.
Since HECM is overseen by the government it has tight regulations, which means that the amount of the loans has limits and you may encounter some additional guidelines to ensure that the borrowers are protected. While proprietary reverse mortgages offering more access to your home equity, the value of your home would be used and other factors can be used depends on your lender to determine the amount you can borrow.
In spite of their differences, both of these have same features that make them similar to each other, such as both of the proceeds can be used for anything and they provide more expensive home loans than a traditional one.