We invited real homeowners to participate in a blind challenge, comparing two home equity line of credit products: a traditional home equity line of credit and a reverse mortgage line of credit. We called this the Home Equity Line of Credit Challenge. Our groups learned that while both products let you tap into the equity in your home to help you fund your retirement, there are some important differences. They discovered that there are options for how and when to repay the loans, that monthly payments and available funds can change over time, and that only one of the products is government insured. Finally, we asked them to choose which product they preferred.
It almost sounds too good to be true.
That was a no-brainer.
I'm gonna reveal now what these products are. Product A is a traditional home equity line of credit, but the product you overwhelmingly chose is a reverse mortgage line of credit. I never would've guessed it.
Does that surprise you? It sounds like it does.
I wish I had known about this before I had taken out the home equity line of credit.
It's a mortgage, or it's a line of credit, but with flexibility. I haven't heard yet any reason why I shouldn't pick this product.
You're in a better position with the reverse mortgage.
The fact that it's a reverse mortgage line of credit, how much do you know about reverse mortgages?
My view was very negative.
This cleared up a lot for me.
I feel a little more informed about the reverse mortgage than I did when I first walked in the door.
I don't think I ever, for some reason, fully understood that a reverse mortgage was, in fact, a line of credit.
I would consider the reverse mortgage now that I've heard more about it.
85 out of 88 people who took the Home Equity Line of Credit Challenge chose a reverse mortgage line of credit. Take the challenge for yourself, and find out if a reverse mortgage line of credit is right for you.