You get the cash today. You won't know the cost for years.
With a loan, you agree to a rate and you can do the math today. With an equity investment, what you pay back depends on what your home is worth later. If your home goes up in value, the bill goes up too. Compare both with your own numbers.
- With a loan, you keep every dollar your home gains in value.
- With an FHA-insured reverse mortgage, you can never owe more than your home is worth.
- We're a licensed direct lender, not an investment company.
What does a share of your home cost?
Three quick questions.
Use the percentage from your own offer. If you don't have one yet, 30% is a common figure.
Change the assumptions
Agreements differ, and this makes a big difference to what you pay.
At that rate your home would be worth $1,110,183.
An illustration, not an offer. Your annual percentage rate will be higher than the note rate.
Covers the FHA upfront insurance premium, origination, and closing costs. An ongoing 0.5% yearly FHA premium is also included.
What you pay back on top of the cash you got.
Interest, FHA insurance, and closing costs, with nothing paid each month.
Illustration only. This is not an offer, a quote, or a commitment to lend. Figures are estimates based on the numbers you enter and assume steady growth in home value, no monthly payments, and no further draws after closing. Actual rates, fees, and agreement terms vary, and your results will differ. The reverse mortgage figure includes an assumed 0.5% yearly FHA insurance premium in addition to the note rate, and your annual percentage rate will be higher than the note rate shown. A loan balance grows over time whether or not your home goes up in value, and you remain responsible for property taxes, homeowners insurance, and property maintenance. Equity agreements vary widely. Some apply a discounted or risk-adjusted starting value that raises your cost, and some limit what you owe if your home loses value, in which case an equity agreement may cost less than a loan. Compare using the terms in your own offer.
Three ways to reach your equity
The same cash in your pocket. Three different things you give up to get it.
| Feature | Equity investmentWhat you're comparing | Reverse mortgageHomeowners 62+ | EquitySelectNo age requirement |
|---|---|---|---|
| Do you know the cost up front? | No. It depends on what your home is worth later. | Yes. The rate is set when you close. | Yes. The rate is set when you close. |
| If your home goes up in value | You pay more | You pay the same | You pay the same |
| Money your home gains | You give up a share of it | You keep all of it | You keep all of it |
| Monthly mortgage payment | None | None required | Interest-only options available |
| When it comes due | On a set date, often 10 years out, ready or not | When you leave the home, sell, or pass away | On the schedule you agree to |
| What you owe is based on | What your home is worth at the end | The cash you took, plus interest | The cash you took, plus interest |
| If your home value falls | Terms vary. Some agreements limit what you owe, others do not. | You never owe more than your home is worth when it's repaid | Standard home equity line terms apply |
| Backed by the government | No | Yes, insured by the FHA | No |
| Who you're dealing with | An investment company | A licensed direct lender | A licensed direct lender |
What happens when the term ends
This is the part that catches people off guard. An equity agreement doesn't wait until you're ready.
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You receive cash today
No monthly payment, and for many people it's easier to qualify than a loan. This part is straightforward, and it's a real benefit.
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Your home goes up in value, and so does the bill
Every dollar your home gains is now shared. The percentage is taken from what your home is worth at the end, not from the cash you were given. So a good housing market makes the agreement cost you more, not less.
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The term reaches its end date
Often ten years. The whole amount comes due whether or not you were planning to move, and whether or not you have the money on hand. This is the first time you find out what the agreement really cost you.
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You sell, refinance, or pay it off
If you're 62 or older, a reverse mortgage may be able to pay off an equity agreement without selling your home. If you're under 62, a HELOC may do the same. Either way, it's worth knowing your options before the date arrives.
See your numbers before you sign anything
Tell us a little about your situation and a licensed loan officer will walk you through what you may qualify for. If a loan isn't the better choice for you, we'll tell you that.
- Takes about two minutes
- Free, with no obligation to proceed
- A real person, not an automated quote
Get your free estimate
Start with two questions. They tell us which programs you may qualify for.
Are you 62 or older?Where should we reach you?
A licensed loan officer will call to go through your options.
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