What is a reverse mortgage? What is a home equity loan? What is the difference between the two? What will they do for you? These are all questions that need answering and that is what we are here to do today.
What is a Reverse Mortgage?
A reverse mortgage is a loan that allows those above the age of 62 that allows them to stay in their home and have extra money to put towards other life wants and needs. These loans do not require a monthly payment. Each and every home has a different value so for more information on what a reverse mortgage and how to get a quote click here.
What is a Home Equity Loan?
Unlike a reverse mortgage, a home equity loan, in fact, does have monthly payments that need to be made. A home equity loan is a loan that is a fixed amount that is secured by your home. This loan gives you the money in the full amount right away and then you make equal payments with interest for the rest of the life of the loan. This is very similar to a mortgage.
The difference between the two is that a reverse mortgage does not require monthly payments and a home equity loan does. A home equity loan has payments that are made until the loan is repaid whereas a reverse mortgage puts money back into your pockets. A reverse mortgage allows you to take the money and use it towards other life needs and wants. So remember, when looking into these options you need to take into account what option would be best for you and your situation. Talk to a reverse mortgage specialist today to gain more information on the difference between these two options and why one might be better than the other.
Both of these loans have different requirements in order to be eligible to take these loans. When it comes to a reverse mortgage you first need to be age 62 or above to be eligible. You also need to have a small mortgage payment or own the home outright. The home equity loan does not have an age requirement but you have to have at least 20% of the equity of the home. Home equity loans have a high-interest rate whereas a reverse mortgage does not. Making sure that you are looking into the requirements of each loan is very important. Which one are you eligible for? Which one has your best interest in mind? These are both questions that you need to have answered before taking a loan out.