The decision to use a HECM Fixed is very different from a traditional mortgage decision. In fact, there is no comparison. The decision is a matter of circumstance and strategy and something you should discuss with a licensed advisor, or even your financial planner.
The fixed rate HECM reverse mortgage is primarily for those who plan to use all or most of their approved principle limit right away. This typically includes those who are paying off an existing mortgage, buying a single-premium annuity, or making other transactions that will eat up much of the available balance early.
A fixed-rate HECM does not allow you to access unused principle limit for future use.
Suppose you are approved for a $150,000 reverse mortgage and your existing mortgage payoff is $100,000. If you use the HECM fixed-rate it will pay off that existing mortgage, and you will never have a payment. However, you will be unable to access the remaining $50,000.
A HECM ARM lets you pay off existing obligations but may also provide access to a line of credit that grows monthly.
The adjustable rate HECM allows you to draw funds at closing to pay existing debts but gives you access to a line of credit that grows monthly. In the case above, the $50,000 line of credit could be accessed in term, tenure, or lump sum payments, or to remain unused while it increases in value each month. Any time you have available funds beyond mandatory debts to be paid at closing, you will seriously want to consider a HECM ARM.
Springwater Capital outlines scenarios that apply to you that can be reviewed with the HUD Counselor, your financial advisor and estate planner. You will make the right decision in the end.