How does a reverse mortgage differ from a home equity loan?
Both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash. The difference is, with a home equity loan you must make monthly payments on the money used. With a reverse mortgage you don’t have to make any monthly payments for as long as you live in the house. There are a few other differences, please inquire with one of our sdvisors for a deeper comparison.
A. While both Reverse Mortgages and home equity loans enable you to turn the equity in your home into “spendable” dollars, there are important differences between the two types of mortgages. With a home equity loan, you must make regular monthly payments to repay the loan. These payments begin as soon as the loan is originated. To qualify for such a loan, you must earn a monthly income great enough to make those payments. If you fail to make the monthly payments, the mortgage lender can foreclose on you, and you can be forced to sell your home. In addition, you may be required to re-qualify for a home equity loan each year. If you do not re-qualify, the lender may require you to pay the loan in full immediately. With a Reverse Mortgage, you do not repay the loan as long as your home remains the principal residence, your income is not considered when qualifying you for the loan, and there is no requirement that you re-qualify each year.
While both a Reverse Mortgage and home equity loans enable you to turn the equity in your home into spendable dollars, there are important differences. With a home equity loan, you must make regular monthly payments to repay the loan. These payments begin as soon as the loan is originated. To qualify for such a loan, you must have a monthly income great enough to make those payments. A Reverse Mortgage has two principle differences from the typical home equity loan: 1. You do not repay the loan as long as the home remains your principle residence. 2. Your income is not considered when qualifying you for the loan.
A. Both a Reverse Mortgage and a Home Equity Loan use the equity you have built up in your home to provide you with readily available cash. They differ in that with a Home Equity Loan you must make regular monthly principal and interest, or just interest, payments. However, with a Reverse Mortgage you do not make any monthly mortgage payments for as long as you live in the home. Q. Can my current income influence my ability to get a Reverse Mortgage? A. No. Since Reverse Mortgage borrowers need not make monthly repayments, there are no income qualifications. Back to Top 3. What are the advantages of a Reverse Mortgage? There are many. Here are a few of the most significant: • REMAIN INDEPENDENT through financial security. A Reverse Mortgage allows you to remain in your home and retain home ownership. • NO MONTHLY MORTGAGE PAYMENTS. You need not pay back the Reverse Mortgage loan nor make any monthly mortgage payments until you permanently move out of the home. • TAX-FREE MONEY. *The mo
While both Reverse Mortgages and home equity loans enable you to turn the equity in your home into spendable dollars, there are important differences. With a home equity loan, you must make regular monthly payments to repay the loan. These payments begin as soon as the loan is originated. And, in order to qualify for such a loan, you must meet credit qualifying standards and have a monthly income great enough to make the monthly payments. Additionally, if you fail to make your monthly repayments, you could lose your home.
