Here’s what you need to know about the differences between a reverse mortgage and a conventional loan
Eligibility Requirements: To be eligible for a conventional loan, borrowers must meet certain credit score and income requirements.
Conventional loans have fixed or adjustable interest rates with monthly payments until paid off. Reverse mortgages provide payments from the lender and become due when the borrower moves, sells or passes away.
Conventional loans require credit score and income, while reverse mortgages need significant equity and age 62 or older. It has fixed/adjustable interest rates and requires monthly payments, but reverse mortgages give payments from lenders and become due on move/sale/death. These are based on purchase price/appraised value, while reverse mortgages are based on equity affected by age, interest rate, and property value. Both options have various fees and costs.