What is the Difference Between a Reverse Mortgage and a Home Equity Loan?
Updated: Apr 19
A Comparison of Reverse Mortgages and Home Equity Loans
For seniors looking to use their home equity to supplement their income, navigating the different loan options available can be confusing. Both reverse mortgages and home equity loans can be useful tools for accessing your home’s built-up equity.
To help you understand your choices, here are the differences between reverse mortgages and home equity loans from the mortgage loan officers at Hartford Funding LTD:
What is a Reverse Mortgage?
A reverse mortgage enables homeowners age 62 or older to access their home’s equity without having to make monthly mortgage payments on the loan until the homeowner passes away, ceases to use the home as the homeowner’s primary residence, or defaults on the loan (including failing to make taxes or insurance payments). The homeowner may receive a lump sum payment from the lender when they take out a reverse mortgage, which can be used for any purpose, such as supplementing retirement income, paying off other debts, or paying for healthcare expenses. Applicants can apply for a reverse mortgage by submitting an application to a mortgage lending company, like Hartford Funding LTD., NMLS ID # 58160
What is a Home Equity Loan?
A home equity loan is a type of loan that allows homeowners to borrow against the value of their home’s equity. Unlike a reverse mortgage, a home equity loan requires regular monthly payments and is for homeowners of any age. This type of loan may be best suited for short-term needs such as financing an addition to your house or making improvements that will increase your property value. Banks and other traditional lenders typically offer home equity loans and do not require counseling before applying.
To learn more about reverse mortgages and to see if you qualify, contact the mortgage loan officers at Hartford Funding LTD.
If you’re looking to apply for a reverse mortgage on Long Island, consider turning to Hartford Funding LTD. We will patiently work with you to offer all the information needed to determine if a reverse mortgage is right for you and then guide you carefully through every step of the application process.
To learn more about our services and schedule an appointment with our mortgage loan officers, call us at (516) 595-7646 or visit our website.