What Are Your Options?

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Home Equity Line of Credit (HELOC)

A home equity line of credit (HELOC) is a revolving line of credit that allows homeowners to borrow money against the equity in their homes. Unlike a reverse mortgage, a HELOC requires borrowers to make monthly payments of both interest and principal. However, the interest rates are generally lower than those of a reverse mortgage, and there are no upfront fees.

One advantage of a HELOC is that it can be used as a standby source of funds. This means that borrowers can access the funds as needed, rather than taking a lump sum upfront as with a reverse mortgage. Additionally, a HELOC does not affect the borrower's ability to pass on their home to their heirs, as the loan can be paid off through the sale of the home.


Refinancing involves taking out a new mortgage with a lower interest rate and using the proceeds to pay off the existing mortgage. This can be a good option for seniors who have built up substantial equity in their homes and want to reduce their monthly mortgage payments.

While refinancing does require borrowers to make monthly payments, the overall interest paid over the life of the loan can be lower than that of a reverse mortgage. Additionally, refinancing does not require borrowers to pay any upfront fees, which can be substantial with a reverse mortgage.

One drawback of refinancing is that it may require a good credit score and a steady income, which may be challenging for some seniors. However, if the borrower is able to qualify, refinancing can be a cost-effective way to access their home's value.

Selling the Home

Selling the home is another option for seniors who want to access their home's equity. While it may not be the ideal solution for everyone, selling the home can provide a lump sum of cash that can be used to pay off debts, fund retirement, or even purchase a smaller home.

One advantage of selling the home is that it eliminates the need for the borrower to make monthly mortgage payments. Additionally, it can provide a larger inheritance for heirs, as there are no loans to pay off.

However, selling the home can also be a difficult decision for seniors who have built strong emotional ties to their homes. It can also be challenging to find a new home that meets the needs of the senior and their family.

While reverse mortgages can be a good option for some seniors, they are not suitable for everyone. Fortunately, there are several alternatives that can provide access to a home's equity without the drawbacks of a reverse mortgage. By considering these alternatives, seniors can make an informed decision about how to best use their home's value to support their retirement and financial goals.

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