Question 77

Reverse mortgage allows homeowners to utilize the equity built up in the home without having to sell.

A reverse mortgage enables homeowners to tap into the equity of their home, providing them with funds while retaining ownership and not needing to sell the property.

A) accelerated mortgage

An accelerated mortgage is a type of mortgage that allows borrowers to pay off their loan faster, typically through higher monthly payments. However, it does not provide homeowners with access to their home equity without selling the property.

B) graduated payment

A graduated payment mortgage features lower initial payments that increase over time. This structure is designed to help borrowers manage payment increases as their income grows, but it does not facilitate access to home equity without selling.

C) sale and leaseback

In a sale and leaseback arrangement, the homeowner sells the property and then leases it back from the new owner. This option does not allow homeowners to access their equity without selling, as the ownership of the home is transferred to another party.

D) reverse mortgage

A reverse mortgage allows homeowners, typically aged 62 or older, to convert part of their home equity into cash while still living in the home. This option allows them to access funds without the need to sell their property.

Conclusion

The reverse mortgage is the only option that specifically allows homeowners to access their home equity while continuing to live in their home, making it the correct choice. Other options either involve selling the home or do not provide access to equity, thereby failing to meet the criteria of the question.