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Benefits of a reverse mortgage vs. a refinance

If you have qualifying equity in your home, a reverse mortgage is a financial tool that allows homeowners to cash out the equity in their home as a lump sum, cash payments or growing line of credit.

Similar to a cash-out refinance, you can use the funds from a reverse mortgage to pay for home upgrades, emergency expenses or other large purchases. With a reverse mortgage, however, you are not obligated to make payments until you move, sell your home or pass away.