Educate Yourself

Traditional vs. Reverse Mortgage

What is a traditional mortgage? This is a type of loan where the lender will lend you the funds to buy a new home. In exchange, you agree to pay the lender back any money you borrowed, along with interest, over an extended period of time.

What is a reverse mortgage? This type of loan allows you to access a portion of your equity that had been built up in your home to be obtained without having a monthly mortgage payment. The existing mortgage balance will be paid off during the process of a reverse mortgage loan. You must be at least 55 years or older to apply for this loan.

So, what home loan is right for you?

traditional refinance makes more sense for those who:

  • Don’t plan on living in this home long term.
  • Have sufficient retirement funds and won’t be supplementing your retirement income.
  • Are not 55 years of age or older.
  • Are not struggling to make your monthly mortgage payments.

reverse mortgage loan makes more sense for those who:

  • Plan to stay in your home long term.
  • Are looking to supplement your retirement income and could benefit from no monthly mortgage payments.
  • Are 55 years of age or older.
  • Want to plan ahead for a rainy day and obtain a line of credit for unexpected expenses.


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