Reverse Mortgage or HELOC – Which is Best? 


If you need to supplement your retirement income, tapping into your home’s equity could be a solution.  There are two simple ways to do it. Your main options are 1) a Reverse Mortgage or 2) a home equity line of credit, or “HELOC”.

They have things in common. There are also many distinct differences.

 

Reverse Mortgage vs. HELOC

Reverse Mortgage
(muuuuuuuch better)

HELOC

Things In Common

Secured by the equity in your home.

Secured by the equity in your home

You can repay the loan at any time.

You can repay the loan at any time.

You will accrue interest over time

You will accrue interest over time.

Differences

 Created by Act of Congress in 1989. Regulated by HUD, Insured by FHA.  Created by Bank

You NEVER need to make a payment until you pass away, as long as you pay your property taxes, insurance and maintain your home, as your principal residence.

You MUST make monthly payments right away. You must pay your property taxes and insurance. If you Stop making monthly payments, you could be foreclosed.

It can NOT be called or cancelled until you pass away, and as long as you pay your property taxes, insurance and maintain your home, and live the home as your principal residence.

Callable, Cancellable or can be Reduced at Banks desire.

You can choose to receive the proceeds as: 1) a lump sum or,   2) a monthly advance or, 3) a growing CreditLine or, 4) a combination of 1, 2, 3.

Line of Credit only.

Unused amount in CreditLine GROWS every month.

NO Growth. Unused amount stays fixed always.

If you choose the Monthly Advance option (Tenure) you will receive it for AS LONG AS you live the home as your principal residence, pay your property taxes, insurance, maintain your home and not declare bankruptcy.

You must make monthly withdrawals until it runs out.

Closing Costs: Higher. Include FHA’s “Mortgage Insurance Premium” (read next).

Lower

INSURED by Federal Housing Administration: This means that, if the value of the home is lower than the outstanding debt, you or your heirs WOULD NOT HAVE to pay any difference.

It is a NON-RECOURSE Loan.

If the value of the home is higher than the outstanding debt, the equity IS yours or of your heirs.

HELOC IS NOT insured. If the value of the home is lower than the outstanding debt, you or your heirs WOULD HAVE TO PAY any difference.

It is NOT a Non-Recourse loan.

Your financial picture is analyzed and may consider credit and income, but are not now dependent upon or limited to those factors. This may change in the future for new applicants, act before changes occur.

A HELOC requires credit and income qualification. If you are on a limited fixed income, the bank might NOT approve you.

Allows you to age in place without the burden of monthly payments.

You MUST make monthly payments right away.

A Reverse Mortgage can be a Life Changing move. Find Out How Much You Could Borrow with a Reverse Mortgage, In the comfort of your home.Fill Out the form below. There is no cost or obligation.  ACT Today! 

Go to your Bank.

Request Funds Estimate From a Reverse Mortgage

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