EMAIL FRIEND Setting the Record Straight Reverse Mortgage Misconceptions You May Have Read or Heard MISCONCEPTION #12 - A REVERSE MORTGAGE IS SIMILAR TO A HOME EQUITY LOAN The only similarity between a reverse mortgage and a home equity loan is that both use the home's equity as collateral. There are several differences: Any homeowner can apply for a home equity loan. A homeowner must be age 62 to apply for a reverse mortgage. A home equity loan must be repaid in monthly payments during a set period of years. A reverse mortgage is not paid back until the homeowner moves out of the property or passes away. A home equity loan requires stable income and a solid credit score. A reverse mortgage does not consider income or credit scores. A home equity loan charges no closing costs but has a higher interest rate over the life of the loan. A reverse mortgage charges upfront closing costs but has lower interest over the course of the loan. Related Links: The lender or bank will take my home We will have nothing to leave our children? When the loan becomes due, the lender will sell my home. There are strict credit and income requirements You cannot have an existing mortgage on your home When the loan comes due you may owe more than the home is worth My Social Security and Medicare benefits will be affected There are restrictions on how the money is used We will have to make monthly payments We will have to pay taxes on the funds received The lender may require immediate repayment Reverse mortgages are predatory It's difficult to qualify for a reverse mortgage Reverse mortgages are prohibitively expensive A reverse mortgage is only for those in desperate need and/or as a last resort Reverse mortgages are not safe Other misrepresentations you may have heard For more information [ PRIVACY POLICY ]     [ TERMS OF USE ]