In addition, arranging sale-leasebacks is usually very complex legally. Go Back to Contents Reverse Mortgages Because of its potential for serving a wide spectrum of older homeowners, most attention in home equity conversion has focused on reverse mortgages. Reverse mortgages have no borrower income qualifications and no repayment requirements until the end of the loan. Usually the house is sold to repay the loan. In most cases, borrowers or their estates never have to repay more than the house value, even if the amount of income paid out exceeds the house value.
Term loans have loan periods of a pre-specified number of years.
The monthly payment size depends on the interest rate, the term length, the property value, and the allowable loan to value ratio. Since the loan must be repaid at the end of the term, careful planning is required for the homeowner's protection. Tenure loans allow homeowners to stay in their homes until they die or decide to move. Credit lines that allow lifetime tenure have become a popular payment choice. Most reverse mortgages now being written are tenure mortgages.