The Difference Between a Second Mortage and a Reverse Mortgage
Here’s how to understand the difference between a second mortgage or home equity line of credit and a reverse mortgage.
In the case of a second mortgage/home equity line of credit, you must demonstrate to a lender that you have low debt and sufficient income to satisfy the loan requirements. Also, you have to make monthly mortgage payments.
A reverse mortgage pays YOU, not the lender, and it doesn’t matter what your current income level may be. After all, you do own the home in which you’re living, right?
The amount of money that you re eligible to borrow does depend upon your age, what the current interest rate may be and what the FHA appraised value of your home is.