3 Mortgage Options for Seniors: Reverse Mortgage, Cash-Out Refinance, or HELOC?
As a senior, you have several options when it comes to tapping into the equity in your home. Three of the most popular are a reverse mortgage, cash-out refinance, or home equity line of credit (HELOC). Which one is right for you depends on your specific situation and goals.
With a reverse mortgage, you borrow against the equity in your home and don’t have to make any monthly payments. The loan doesn’t come due until you die, sell the house, or move out. This can be a good option if you want to stay in your home and don’t need the cash right away.
With a cash-out refinance, you take out a new mortgage for more than you owe on your current one and pocket the difference. This is a good option if you have good credit and can get a low interest rate. You’ll have to make monthly payments on the loan.
With a HELOC, you borrow against the equity in your home and make monthly payments, but you have the flexibility to pay back the loan over time or just make interest-only payments. This can be a good option if you need the flexibility or don’t want to tie up your home equity.