There are several differences between a regular mortgage and a reverse mortgage. A regular mortgage is a loan program that is used to purchase a home or property. The loan is repaid in certain increments each month over the course of many years. On average a mortgage is a thirty year program, but can be as little as five or as many as fifty years in length. A reverse mortgage is a program designed for people over the age of sixty two that own their home and are looking for additional income. A reverse mortgage takes the available equity in the senior’s home and converts it into a source of income. At the end of the reverse mortgage program the home must be sold to repay the loan amount. A reverse mortgage program can last for many years like a regular mortgage.
Are There More Differences Between A Mortgage And A Reverse Mortgage?
A reverse mortgage can only be acquired by a person age 62 or older. A regular mortgage can be obtained by anyone that can get approval. A regular mortgage must be paid each month; a reverse mortgage is not paid until the home is sold. Another difference between the two programs is that a reverse mortgage is used for income and a regular mortgage is used for purchasing.
Can A Reverse Mortgage Be Used To Purchase Another Home?
A new program has been started that allows seniors to use the equity in their current home to purchase a new home and not make any further payments. This reverse mortgage program is simply referred to as a purchase reverse mortgage ans is a great tool for seniors that want to move into a home that better fits their needs without out of pocket expenses.
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