Considerations Regarding Getting a Reverse Mortgage vs. Getting a Second Mortgage
by John Doe
A reverse mortgage and a second mortgage are both ways that homeowners can access the equity in their homes. However, there are some key differences to consider before deciding which option is right for you.
Reverse mortgages are only available to homeowners age 62 or older. With a reverse mortgage, you can borrow against the equity in your home without having to make any monthly payments. The loan is not due until you sell your home, move out, or pass away.
Second mortgages are available to all homeowners, regardless of age. With a second mortgage, you will need to make monthly payments, along with your regular first mortgage payment. The interest rate on a second mortgage is usually higher than the rate on a first mortgage.
Another key difference is that a reverse mortgage will typically have a higher interest rate than a second mortgage. This is because the lender is taking on more risk since they are not requiring any monthly payments.
Finally, it is important to note that a reverse mortgage will impact your eligibility for government benefits, such as Medicaid. If you are considering a reverse mortgage, be sure to speak with a financial advisor to see if it is the right option for you.