A hedge loan is a loan that is obtained by using a hedge fund-IRA as collateral, and a reverse mortgage is where money is borrowed by refinancing a home.
A Hedge Loan is completed by using the hedge funds as collateral for the home loan. It does not have the same restrictions as with a reverse mortgage but there are downsides to this type of loan.
Hedge Funds
A Hedge fund consists of stocks high risk and low risk that form a balanced portfolio. These funds can be used as collateral for several types of loans. The Hedge fund firm can estimate how much of a loan the borrower can receive based on the value of their portfolio. When a Hedge fund is used for a home loan the private lender will put a lien on the property and they usually do not lend more than 65% of the purchase price of the home.
A reverse mortgage is a loan that is refinanced by the owner in order to get cash from the sale of the original property. This money does not have to be paid back unless the owner dies or moves out of the property.
Comparison
The best way to decide between using hedge funds and applying for a reverse mortgage is to get the quotes and determine which quote is better or who will offer the best deal. In most cases a reverse mortgage will probably pan out better because the borrowed money for the reverse loan does not have to be paid back but with the hedge fund there is a lien on your property. On the other hand any money made from the home with a hedge fund will go back into the fund to be used at a later date possibly. The best way to decide is to sit down with the brokerage firms and get everything in writing and see which one is better for your situation.
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