General Mortgage KnowledgeQuestion 111 of 400
A 68-year-old homeowner wants to convert home equity into payments without making monthly mortgage payments. Which product applies?
a.Interest-only ARM
b.Balloon mortgage
c.Reverse mortgage (HECM)
d.Bridge loan
Explanation
A Home Equity Conversion Mortgage (HECM), the FHA reverse mortgage, lets borrowers age 62+ tap equity with no required monthly payments; the loan is repaid when the home is sold or the borrower leaves. The other products all require ongoing payments.
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