4. Possessions Sorts of: Each other contrary mortgages and you may HELOCs are usually limited for number one homes. Although not, contrary mortgages may also be readily available for certain types of financial support attributes, such duplexes otherwise triplexes.
5. Loan Limits: Contrary mortgages features a maximum loan limitation, hence varies based on the borrower’s ages, house value, and you can interest rates.
six. Repayment: Among the many differences between contrary mortgage loans and HELOCs was the way they is repaid. With a face-to-face financial, the new borrower need not make any costs for as long while they inhabit your house. The loan is paid back if borrower carries the house otherwise passes away. That have a good HELOC, the newest borrower need generate monthly obligations to repay the loan.
Total, the brand new qualifications criteria to own reverse mortgage loans and HELOCs differ significantly. While both solutions want individuals to have significant house security, contrary mortgage loans are more open to more mature borrowers with straight down earnings and you may credit ratings. HELOCs, at the same time, be more suitable for young individuals that have a good credit score and a beneficial constant income. At some point, the best option depends on the new borrower’s specific finances and you may requirements.
Whom Qualifies to possess Contrary Financial and you will House Equity Personal line of credit – Opposite Mortgage against: Domestic Equity Line of credit: That’s Top
