"What is the difference between a reverse mortgage and a home equity loan. This is a common reverse mortgage FAQ. There are three main differences between a reverse mortgage and home equity loan.
First, reverse mortgages have age requirements. Actually, both have age requirements. With a regular loan, mortgage, or home equity line of credit, you just have to be of legal age to sign a contract. With a reverse mortgage loan, you have to be aged 62 and older. However, there are some states that allow you to do a reverse mortgage at age 60 or 61.
The second difference is that there is a strictor equity requirement. With a home equity line of credit, you can often borrow 80, 90 or even 100% of the appraised value. There has even been programs in the past that allow you to borrow 125% of your home's value (second mortgage called a 125). With a reverse mortgage you can access anywhere from about 50% to 75% depending on your age.
The third difference is that you don't have to make a monthly payment to the bank for as long as you live or for as long as you live in your home. You still own the home just like with a regular mortgage, so you'll have to pay property taxes and maintain insurance.
A reverse mortgage is all about saving money. You may also want to check out these Money Management Tips for Seniors.