Reverse Mortgages

        Differences between regular mortgages and reverse mortgages

Regular Mortgages

Reverse mortgages

Age requirement

None. You cannot legally commit to a mortgage until you’re 18, unless you have a co-signer

Must be 62 or older

What you borrow

Usually a lump sum to buy your property

An amount based on a percentage of the equity you’ve built up in your property

How the payments work

You pay the lender each month to pay back the loan, plus taxes and insurance

Lender pays you a lump sum or monthly payments — like an advance payment on your equity

But you still must pay taxes and insurance, and you must maintain the property

The balance you owe

Goes down over time

Generally, your monthly payment already includes interest

Goes up over time

You will owe more than the amount you borrowed because interest is added every month

Mortgage must be repaid when you die or move out – usually by selling your home

Is interest tax deductible?

Yes — for the interest paid each year, up to a certain amount

Not until you pay the loan back