# What is the difference between a home equity loan and a reverse mortgage

**URL:** <https://boards.straightdope.com/t/what-is-the-difference-between-a-home-equity-loan-and-a-reverse-mortgage/276387>\
**Category:** Factual Questions\
**Created:** [November 24, 2004, 12:20am UTC](https://boards.straightdope.com/t/what-is-the-difference-between-a-home-equity-loan-and-a-reverse-mortgage/276387 "2004-11-24T00:20:34Z")\
**Posts on this page:** 3\
**Page:** 2

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**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\
**Post date:** [November 30, 2004, 2:41pm UTC](https://boards.straightdope.com/t/what-is-the-difference-between-a-home-equity-loan-and-a-reverse-mortgage/276387/21 "2004-11-30T14:41:57Z")

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> [@The\_Llama](#):
>
> I mean, _all_ mortgages are home equity loans if you want to get picky.

😃

Great response.

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**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\
**Post date:** [December 1, 2004, 5:27pm UTC](https://boards.straightdope.com/t/what-is-the-difference-between-a-home-equity-loan-and-a-reverse-mortgage/276387/22 "2004-12-01T17:27:42Z")

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> [@Gfactor](#):
>
> Some of the advantages to a reverse mortage are:
> 
> 1. As mentioned, no more mortgage payments. You still have a mortgage, but you don’t pay it. Instead it accrues interest and grows, which means your equity shrinks.
> 
> 2. A source of credit or cash. There are reverse programs that offer monthly payments or lines of credit. The money is tax free because it is proceeds of a loan.

I forgot to mention:

1. Hi Opal!

2. Reverse mortgages are easy to get. Because there are no scheduled payments. The lender does not care about creditworthiness. The underwriting decision is primarily based on the age of the borrower and the value of the property. So a person with bad credit can get a reverse mortgage without having to enter the subprime market and pay the points, junk fees, and higher interest rates associated with that.

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**Author:** ![aahala](https://avatars.discourse-cdn.com/v4/letter/a/a88e4f/32.png) [@aahala](https://boards.straightdope.com/u/aahala)\
**Post date:** [December 1, 2004, 5:53pm UTC](https://boards.straightdope.com/t/what-is-the-difference-between-a-home-equity-loan-and-a-reverse-mortgage/276387/23 "2004-12-01T17:53:14Z")

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Oldtimers like me can remember the days when we didn’t have Home Equity Loans(good). We only had Second Mortgages(bad).

Those were also the times we didn’t get cashback(good) when we bought a car for too much(bad). We had to pay before our insurance kicked in(bad) and now we have co-pay(maybe not good, but not as bad as you-pay).

By whatever name, a rose is a rose is a rose. Things change, things stay the same.

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