Reverse Mortgage
Available to homeowners 62 and older, a reverse mortgage converts home equity into cash without requiring monthly mortgage payments. Instead, the lender pays the homeowner as a lump sum, monthly payments, or a line of credit. The loan balance grows over time and becomes due when the borrower sells, moves out, or passes away. Most reverse mortgages are FHA-insured (HECMs), which protects borrowers from owing more than the home’s value. Borrowers must live in the home as their primary residence, keep up with taxes and insurance, and complete HUD-approved counseling. This option works well for seniors who want to age in place, supplement retirement income, or eliminate an existing mortgage payment — though it reduces equity available to heirs.

Home Equity Loan
A home equity loan provides a lump sum against your home’s equity, repaid through fixed monthly payments at a fixed rate over 5-30 years. It’s a good fit for a known, one-time expense — in-home care, medical bills, accessibility renovations, or debt consolidation. Qualification depends on equity, credit, income, and debt-to-income ratio, and monthly payments must fit within a fixed retirement income.

Home Equity Line of Credit (HELOC)
A HELOC offers flexible, ongoing access to home equity, similar to a credit card. Borrowers draw funds as needed during a set draw period and pay interest only on what they use. This makes it well-suited to ongoing or unpredictable senior care costs, like gradual home modifications or caregiving expenses. Rates are typically variable, so payments can fluctuate. After the draw period, a repayment period begins. It’s ideal for seniors who want control over how and when they access equity.