Reverse Mortgage
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HELOC
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Are monthly payments required?
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No. Monthly payments are not required for the life of the loan.
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Yes (usually interest only). For an initial draw-down period, then payments increase to amortize loan balance.
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Is credit line growth guaranteed?
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Yes. Undrawn credit line balance grows at the same rate charged on balance owed.
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No. The credit line amount does not grow, and access to funds stop at the end of the initial withdrawal term.
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Is there a mandatory payoff date?
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No. Repayment is not required as long as any borrower continues to reside in the property, and the loan remains in good standing.
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Yes. For the initial period, the borrower is paying interest only, then the loan balloons and payments increase dramatically.
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Can my lender freeze/limit access to funds?
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No. Funds can be accessed any time during the life of the loan, and lenders cannot freeze access to funds, as long as it is in good standing.
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Yes. Access to funds is limited to the initial draw-down period, normally the first 7 to 10 years. Most HELOC's also enable lenders to freeze access with notice.
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Can I (or my heirs) ever be held liable for more than the value of the home?
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No. The balance owed can never exceed property value at the time of repayment.
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Yes. Borrower(s) are personally liable for any deficiency plus legal collection and collection cost.
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