A reverse mortgage:
Understand the Problem
The question is asking for the definition or correct description of a reverse mortgage, among several potential answers.
Answer
Provides older homeowners with tax-free income in the form of a loan repaid when the home is sold or the homeowner dies.
The correct answer is: provides older homeowners with tax-free income in the form of a loan that is repaid when the home is sold or the homeowner dies.
Answer for screen readers
The correct answer is: provides older homeowners with tax-free income in the form of a loan that is repaid when the home is sold or the homeowner dies.
More Information
Reverse mortgages are designed for older homeowners to convert part of their home equity into cash without monthly mortgage payments. The loan is repaid when the homeowner sells the house or passes away.
Tips
Common mistakes include confusing reverse mortgages with traditional second mortgages or thinking they involve regular interest payments.
Sources
- What Is A Reverse Mortgage? - Bankrate - bankrate.com
- What is a reverse mortgage? | Consumer Financial Protection Bureau - consumerfinance.gov
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