How does a reverse mortgage differ from a traditional mortgage or home equity loan?
A reverse mortgage is the opposite of a traditional mortgage. With a traditional mortgage or home equity loan, you borrow a large amount of money and make monthly payments. A reverse mortgage pays you and is available regardless of your current income or debt-to-income ratio. With a reverse mortgage, you borrow small amounts – monthly or at other intervals — through a line of credit. Payment is required only once, at the end of the loan, typically when you no longer occupy the home as your principal residence.
