Factors When Choosing Between Reverse Mortgages vs. HELOCs vs. Equity Sharing Agreements
Considerations When Getting a Mortgage vs. a HELOC vs. an Equity Sharing Agreement
When it comes to figuring out how to access the equity in your home, there are a few different options available – each with their own set of pros and cons. Here are some things to consider when deciding whether to get a mortgage, a HELOC, or an equity sharing agreement:
Mortgage:
-A mortgage is a loan that is secured by your home. This means that if you default on the loan, your home could be foreclosed on.
-Mortgages typically have lower interest rates than other types of loans.
-You may be able to get a tax deduction for the interest you pay on a mortgage.
HELOC:
-A HELOC is a line of credit that is secured by your home. This means that if you default on the loan, your home could be foreclosed on.
-HELOCs typically have higher interest rates than mortgages.
-You may be able to get a tax deduction for the interest you pay on a HELOC.
Equity Sharing Agreement:
-An equity sharing agreement allows you to sell a portion of your home’s equity to an investor in exchange for cash.
-You do not have to make any monthly payments on the loan and you will still retain ownership of your home.
-If the value of your home goes up, the investor will make a profit, but if the value of your home goes down, the investor will lose money.
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