Mr. Rothstein says that while borrowers can benefit from the reduced cost on a saver reverse mortgage (saving $12,000 on a $600,000 home, for example), they also will have their borrowing power reduced by about 20 percent compared with what they can borrow on a standard reverse mortgage.
"There are basically four types of reverse-mortgage options," Mr. Rothstein says. "Borrowers can choose a fixed-rate or an adjustable-rate standard HECM or a fixed-rate or adjustable-rate saver HECM. The fixed-rate options both require that borrowers take out the money in a lump sum. The adjustable-rate loan, which can adjust monthly, offers borrowers more choices."